The World Bank's International Finance Corporation (IFC) is reported to be putting pressure on global payments companyNet1 UEPS Technogies to complete its assessment into its alleged illegal lending practices to beneficiaries of South African Social Security Agency (SASSA).
The assessment comes after pressure from several sectors of South African society including human rights organisations who have alleged that Net1's subsidiaries are improperly marketing loans and other financial products to more than 17 million South Africans on social security.
The IFC is a member of the World Bank Group and has funds that are managed by IFC Asset Management Company (AMC). In 2016 the IFC added Net1 as one of its portfolio companies as it announced that it had made a combined equity investment of $107 million in Net1 UEPS Technologies Inc. to "expand financial inclusion in Sub-Saharan Africa and beyond".
One such human rights organisation in South Africa that has pressurized Net1 regarding its lending practices is The Black Sash Trust. Over the years Black Sash have said that the Net1 and its subsidiaries use SASSA beneficiaries personal information to market their other services and products such as loans, airtime and mobile phone insurance.
Net1’s South African subsidiary, Cash Paymaster Services, was awarded a contract to distribute social security payments in 2012. South Africa's Constitutional Court ruled that the contract was invalid in 2014 because of how it was awarded. In March 2017, when the contract was due to expire at the end of the month, SASSA had failed to comply with an order to find a new company to make social security payments on behalf of the government and thus the Constitutional Court ruled that Net1 must continue making the payments for another 12 months starting 1 April 2017 and also ruled that that Net1 or any of its subsidiaries couldn’t use data gathered from SASSA beneficiaries for any other purposes except for social security payments.
Amid all these allegations Net1 has denied any wrongdoing.Share this via: