Covid-19: Low-income households turn to loan sharks to fight hunger

New research showed that with thousands of South Africans’ wages or incomes suspended and depending on social grants that women, with no savings buffers, are turning to loan sharks to provide for their families.

Some of these loan sharks charge interest rates as high as 40%.

The research, done by Pietermaritzburg-based non-governmental organisation Economic Justice and Dignity (PMBEJD), found that the government’s social grant top-ups would not prevent the penetrating hunger in many households.

This as the price of food in supermarkets continued to increase.

According to the research, the average household food basket increased by 7.8% (R250) between March 2020 and May.

It found that families living on low incomes may have spent 30% (R973.93) more on food in May 2020 than they did two months ago.

With children and workers at home, food runs out quicker resulting in the buying of more food compared to normal circumstances.

The lockdown regulations further prevented many household heads from shopping around for the cheapest prices.

The food shortfall would result in hunger and longer periods of nutritional deprivation.

PMBEJD researcher Dr Julie Smith said they found more households heads buying bulk in staple foods that have a lot of starch and fewer proteins.

“Many women buy these foods so that their children cannot starve, but they are not necessarily nutritious and might jeopardise the development of children.”

Late last year the PMBEJD research found stunting levels caused by poverty in boys were up to 30% and 25% for girls.

Earlier this month, a Stats SA survey found that loss of income due to covid-19 pandemic may lead to higher levels of food insecurity in many households.

Smith said although their research was done in Pietermaritzburg, it was unlikely not to play itself out across many homes across South Africa.

This as the percentage of respondents who reported receiving no income increased from 5.2% before the national lockdown to 15% by the sixth week of the lockdown.

PMBEJD tracks what low-income households spend on food, what they purchase and how that food is managed by the women who have the primary responsibility for it.

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