Do You Need a Mashonisa Loan?
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✅ Do you need to borrow money from mashonisa?
✅ Do you need a mashonisa private lender to solve your money problems?
✅ Are you thinking, ‘I need a loan shark ASAP tonight’?
✅ Are you looking for mashonisa near you, but don’t know where to start?
✅ Do you believe a mashonisa is the solution to your money worries?
Indeed, mashonisa loans are one option in South Africa, especially in local communities.
But are they a viable option? When you think you need a loan shark, it might feel like you have no other options.
The truth is that most borrowers don’t really need mashonisa – they’re simply looking for easy and fast access to credit to get the funds they need when they need it most.
However, not all credit providers are the same. Informal moneylenders, mashonisa, and loan sharks pose a higher risk to borrowers than legitimate lenders.
Fortunately, adequate financial literacy helps borrowers navigate the credit industry better and ensures better money decisions.
This in-depth guide on loan sharks in South Africa aims to educate borrowers about the informal lending market, including important areas like how loan sharks work and why they should be avoided.
✅ Need a cash loan in South Africa?
Who and What Are Mashonisas?
What is mashonisas exactly and what role do they play in the South African credit industry?
Here’s a short mashonisa definition: Any illegal moneylender that charges high interest rates and uses unlawful collection methods.
The meaning of mashonisa in Zulu means “to sink” or “to make poor.” Even in English, the clue to the meaning of loan shark is in the nickname… sharks.
These lenders prey on weak and financially vulnerable borrowers, and most mashonisa practices are labelled as criminal.
You can also think of South African mashonisa loan sharks as providers of loans to high financial risk borrowers or lenders to those with poor credit records.
They operate outside the law and target low-income and disadvantaged communities and neighbourhoods.
That said, private loan sharks have become a normal and widespread part of society.
They are simply ordinary people, socially embedded and an accepted part of the community.
Law authorities may view these home-based informal lenders as criminal, but the communities they live in are often grateful for the services they offer.
Historically, mashonisas date back as far as the early 1980s.
At that time, South African apartheid laws restricted access to credit for disadvantaged, indigenous people.
Thus, the informal microfinance sector grew from necessity and has flourished since then.
BOTTOM LINE
- Who is a mashonisa? – In South Africa, this is an informal moneylender not registered with the National Credit Regulator.
- What is a mashonisa in English? – Mashonisas are also called loan sharks.
- What is a loan shark? – The definition of a loan shark is an illegal moneylender who charges unlawful interest rates.
How Does Mashonisa Work?
Let’s look at how a typical mashonisa business works, what loan shark rates are like, and other features associated with mashonisa loan sharks.
How Do You Find a Loan Shark?
How Do You Apply?
How Much Can You Borrow?
How Long Can You Borrow?
What’s The Loan Shark Interest Rate?
What Can You Use a Mashonisa Loan For?
Who Can Take Out a Mashonisa Loan?
Which Collection Procedures Do Mashonisa Use?
Why are Mashonisa Loans Popular?
Statistics of Mashonisa in South Africa
South African mashonisa have quite a long history, and the following statistics provide key insights into the world of these local loan sharks.
There may be over 40,000 active mashonisa in SA
In 2018, estimates indicate there were over 40,000 active mashonisas. This implies that many borrowers in South Africa rely on mashonisas for help in difficult times.
According to the report,2 non-registered credit lenders, or ‘loan sharks’ appear to be more widespread and deeply rooted than previously thought, with a whooping ratio of 1:100 for every household in informal settlements.
Demand for credit remains high despite high interest environment
According to TransUnion’s Consumer Pulse Report for Q4 20233, demand for credit, such as personal loans, was noteworthy considering that interest rates were at peak highs.
On the other hand, according to the NCR’s 2024 Credit Market Report4, the total value of new credit granted is ever decreasing.
The Consumer Credit Market Report for the first quarter of 20235 shows the number of finalised credit agreements decreased by 13.04% from the previous quarter. Similarly, the number of rejected credit applications increased from 68.73% to 70.07%.
These numbers indicate that when it comes to demand and supply, the formal credit sector may not be meeting the needs of borrowers.
So when borrowers can’t access formal credit, what do they do? That’s where mashonisa loan sharks come in – and it seems not even the high interest rates are enough to deter consumers.
The problem with mashonisas dates back a long way
According to a survey by The Black Sash Office6, 75 borrowers from the coloured and African communities were interviewed during June and July 1999. Here are the key findings:
- 63% of borrowers had low incomes, earning R1000 a month or less.
- 62% relied on informal moneylenders as their main source of loans.
- 68% said they would not pay other expenses because of debts, and 55% said they first paid the loan sharks before and instead of other expenses and debts.
Unfortunately, today, the problem still remains.
Statistics show that 47% of all credit active people have trouble with paying debts, with millions of people at least three months behind on their payments on one account or more.7
The issue of over-indebtedness continues to worsen when people are forced to rely on informal credit to meet survival needs like food, rent, electricity, and school fees.
Advantages of Mashonisa
The perks of mashonisa stem from the fact that they are the main or only source of credit for the poor and uncreditworthy.
After all, not everyone has a good credit score or a reliable, acceptable monthly income.
People who are looking for mashonisa loan sharks to meet their financial worries appreciate the off-record nature of the transaction, as well as its timeline.
Risks Of Mashonisa
The dangers of mashonisa loans stems from the fact that many borrowers lack the financial literacy or education to understand the implications of the credit agreements they are entering into.
The truth is that people need to learn how to manage their income and budget properly.
That way, they can avoid difficult situations where they have to turn to private loan sharks in order to survive.
Are Mashonisa Unlawful?
As long as they are not registered with the National Credit Regulator, mashonisa businesses are regarded as criminal enterprises.
There is no doubt that mashonisas run illegal cash loan businesses and are known for taking forceful measures to recover their investments.
Borrowers should also keep in mind that they should not agree to the terms and conditions of mashonisa loan shark agreements.
That’s because if anything were to go wrong, there would be no recourse in terms of the legislation that regulates registered credit providers.
»READ MORE: Are Mashonisa Illegal?
Can You Find Mashonisa Online?
If you have money headaches, applying for a loan online is usually the quickest way to solve the problems.
These days, mashonisa are also spreading their reach and offering loans via digital means.
However, just because this option is available doesn’t mean borrowers should take it.
Instead, it’s better to explore less risky alternatives with registered credit providers that adhere to rules and regulations put in place.
Is a Mashonisa Loan Right for You?
Given that mashonisas offer loans on bad terms, it’s easy to think that many people would avoid dealing with these loan sharks.
But, these community moneylenders have been around for a long time. People have also been taking loans from private mashonisa for a long time.
But before taking this route, it’s good to remember that mashonisa meaning in Zulu is ‘to bankrupt.’ In addition, another name for loan shark is ‘extortionate moneylender.’
It also helps to check out mashonisa loans reviews and hear about the negative effects of borrowing from informal moneylenders from real people who have lived through the experience.
Why You Should Avoid Mashonisas At All Cost: Case Studies
Mashonisas, loan sharks, and the informal lending sector represent the dark underbelly of the South African credit industry.
It’s made up of unscrupulous money lenders who feed on desperate individuals.
The following stories show the distressing experiences that many South African borrowers go through at the hands of these ruthless loan sharks.
These stories serve to emphasize the reasons why the problem of mashonisa in South Africa needs to be addressed urgently.
Case Study 1: Permanent Debt Trap Situation
Case Study 2: Deliberate Entrapment By Mashonisa
Case Study 3: Taking Advantage of Vulnerable Elderly
Case Study 4: Borrowing at The Risk of Life And Limb
Dealing With Illegal Moneylenders
When it comes to dealing with mashonisa and loan sharks, the best advice is – don’t. You should go to great lengths to make sure you never owe a loan shark money in the first place.
However, if you’re already involved with a mashonisa, the best thing is to find a way to escape their clutches. For example, you can confide in a trusted relative or friend.
Once you pay off the loan shark, MAKE SURE YOU NEVER DO IT AGAIN.
In the future, it’s important to remember that it’s never a good idea to borrow money if you don’t have a repayment plan in place.
Best Alternatives to Mashonisa Loans
Mashonisas, banks, and other financial institutions are all entities that provide credit, but they are not all made the same.
In South Africa, there are, roughly speaking, three main options to consider:
- Formal financial sector: This sector comprises the big banks and mainstream financial institutions owned by English-speaking capitalists. This sector offers bank loans, housing loans, store cards for clothing, food, and retail shopping, furniture and appliances on instalments.
- New microlending sector: This sector is made up of alternative lenders, some of who operate online or have small brick-and-mortar branches to service clients. These lenders typically offer smaller, short-term loans and target employed borrowers.
- Informal microlenders: These are the neighbourhood, home-based moneylenders – AKA mashonisas. They are commonly found in black townships, communities, and villages and offer small short term loans to people in their immediate surroundings or social circle.
Before borrowing money, it’s crucial to compare and analyse your options before making a decision.
When you look at loan sharks vs legitimate lenders, there are key differences across the following factors.
As you can see from the table below, borrowing from a legitimate lender is generally safer and more reliable than dealing with mashonisas who operate outside the law and engage in predatory practices.
| Legitimate Lenders | Mashonisa | |
| Legal & Regulatory Oversight | ✔️ | ❌ |
| Responsible Lending | ✔️ | ❌ |
| Competitive Interest Rates & Fees | ✔️ | ❌ |
| Repayment Flexibility | ✔️ | ❌ |
| Fair Practices | ✔️ | ❌ |
| Terms and Conditions | ✔️ | ❌ |
| Transparency | ✔️ | ❌ |
| Credit Reporting | ✔️ | ❌ |
| Legal Recourse & Consumer Protections | ✔️ | ❌ |
Loan sharks vs. legitimate lenders
Legality and Regulation
Interest Rates and Fees
Terms and Conditions
Credit Reporting
Borrower Protection
Mashonisa Vs Legitimate Lenders
Compare Mashonisa With Other Loan Options
The good news is that there are many other safer loan options to explore.
So, it’s not wise to rely on ‘dark’ lenders like loan sharks when there are certified and registered credit providers who have the law on their side and are bound to protect your consumer rights.
When comparing mashonisa loans with other legitimate options, be sure to look at critical factors.
Consider factors like the APR, repayment terms and flexibility, convenience, ease of access, time to payout, and whether the terms and conditions of your loan contract are fair and financially sensible.
»READ MORE: Mashonisa Vs. Personal Loan Vs. Credit Card
Mashonisa Near Me: Find Alternatives Online
Imagine the bills are piling up and unexpected or emergency expenses are making everything worse.
When you find yourself in a desperate financial situation, looking for ‘private loan sharks near me’ might seem like a viable solution.
The good news is that instead of searching for ‘real loan sharks near me,’ you can seek legitimate alternatives online.
Whether you’re looking for loan sharks in Middelburg Mpumalanga or Khayelitsha Cape Town, you can be sure there are safer options from top online South African lenders.
Mashonisa in Gauteng
You don’t have to worry about finding loan sharks in one of South Africa’s wealthiest provinces.
In this day and age, technology has come to the rescue, putting you in touch with legitimate online lenders.
That way you can avoid the significant risks associated with informal lending.
Mashonisa in Durban
Some borrowers believe that loan shark deals are beneficial, but this is far from the truth.
Owing a loan shark money can complicate your life not just financially, but it can also cause psychologically harm.
Skip this option in Ethekwini and explore better alternatives online!
Mashonisa In Pietermaritzburg
No doubt, there are many informal lenders available in PMB. But what if you could explore a simpler and safer option?
Fortunately, you can now apply for a loan online and enjoy all the convenience without the potential risks associated with loan sharks.
Mashonisa Loans In Pinetown
If you’re looking for a loan with an attractive interest rate in the beautiful city of Pinetown, then forget about mashonisa deals.
The best alternatives with competitive rates and fees are only a click away.
Mashonisa in Richards Bay
Quick loans with minimal difficulty and an easy online application are available for borrowers in RCB.
Most people turn to illegal lenders because they feel they have no choice.
However, with so many online lenders at your disposal, the best thing you can do for your financial situation is to only deal with legit credit providers.
Mashonisa In Greytown
Life is full of cashflow gaps. For some, the only place they know to get cash quickly is with an illegal lender.
But there are alternatives to taking out a loan from a loan shark. Your future self will thank you!
Mashonisa In Port Shepstone
Are there other ways of borrowing besides loan sharks?
Yes, CashCrescent provides you with safer alternatives to access the credit you need, whether it’s for debt consolidation, repairs, health care, or other expenses.
Mashonisa in Capetown
Even if you have a low income or bad credit score, you deserve access to formal credit if it helps your financial situation.
Mashonisas are not the only choice – there are other borrowing options you can explore online.
Mashonisa In Bloemfontein
Borrowing from loan sharks can be a slippery slope, littered with sky-high rates and an excessive debt burden.
On the other hand, applying for a loan with a legitimate lender offers benefits, such as helping you build your credit rating.
Mashonisa in Polokwane
The capital city of the Limpopo Province offers many borrowers easy access to online credit from formal lenders.
That means there’s no need to borrow from mashonisa loan sharks.
Mashonisa In Nelspruit
Need extra cash and not sure where to start? Don’t rush off to the nearest corner to find a loan shark!
You can apply for a loan with CashCrescent, right there in the comfort of wherever you are.
Mashonisa In Witbank
It might seem like borrowing from a loan shark is an easy and hassle-free process.
However, there are many potential risks associated with this option.
Protect yourself by only dealing with registered credit providers.
Mashonisa In Rustenburg
As a borrower, you must be protected from reckless lending and unfair practices.
That’s why it’s not a good idea to get a loan from mashonisa. It’s better to apply with licensed and certified credit providers instead.
Mashonisa In East London
After borrowing from mashonisa, the problems don’t end there.
You can avoid the risk of becoming locked in a debt spiral by only working with authorised and regulated credit providers.
Mashonisa In Port Elizabeth
There are many occasions where extra cash is required in PE.
Mashonisa loans may seem like a good idea, but there are better lenders available and CashCrescent can put you in touch with them.
It’s quick and easy.
Apply for Mashonisa Loan Alternatives Online
Looking for loan sharks online? The good news is you can apply for better alternatives online.
Borrowers searching for a mashonisa loan can compare loan options in one place with CashCrescent.
Apply from the comfort of your home and get multiple loan offers in one go from our lender partners, who are registered credit providers, and certified with the National Credit Regulator.
FAQs: Mashonisa Loans
Are loan sharks real?
Who regulates mashonisas?
What do loan sharks do?
Can I get Mashonisa loan for blacklisted borrowers?
SOURCES
1IOL website 2020. Loan sharks feasting on the poorest by charging interest of 50 to 112%. (Read here.)
2Wonga Mashonisas brochure 2018. Understanding the role of mashonisas in the South African credit market. (Read here.)
3TransUnion 2023. South Africa’s consumer market remains resilient despite a high-interest rate environment. (Read here.)
4National Credit Regulator (NCR). Consumer Credit Market Report, First Quarter, March 2024. (Read here.)
5National Credit Regulator (NCR). Consumer Credit Market Report, First Quarter, March 2023. (Read here.)
6The Black Sash Office. Survey in Knysna in the Western Cape. (Read here.)
7The Daily Maverick 2012 Archives. Today’s loan shark feeding frenzy, tomorrow’s revolution. (Read here.)
8Development South Africa, Online Journal 2010. Informal moneylenders in the Limpopo, Gauteng and Eastern Cape provinces of South Africa. (Read here.)
9City Press 2018. The murky world of loan sharks. (Read here.)
10Sowetan Live 2020. Loan shark practice hits hungry elderly. (Read here.)
11GroundUp 2015. I would never borrow again from a loan shark. (Read here.)
