Banks still have a key role in social grants plan
Hurdles include standard low-cost product and the need for a subsidy
Plans to ensure that the banks play a key role in distributing social grants remain on course despite concern recently expressed by the CEO of the South African Social Security Agency, Abraham Mahlangu, in a letter to the Banking Association of SA (Basa). Securing a sustainable role for the banks would put an end to the involvement of Net1 subsidiary Cash Paymaster Services. It might also lead to a return to the time before CPS’s controversial involvement in the administration of social grants when 85% of beneficiaries received grants from banks. A source close to discussions between the banks and Sassa told Business Day that the Treasury, Sassa and the banks were determined to find a sustainable long-term solution to challenges involved in distribution of social grants to 10.5-million beneficiaries every month. A critical issue for the banks revolves around the need for a subsidy to cover their costs. However, the Social Assistance Act does not allow for beneficiaries to be charged...
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