How Retailers Have Been Exploiting SASSA Beneficiaries?

Postbank, the bank tasked with distributing social grants in South Africa, says it is actively working to prevent exploitation of grant beneficiaries by retailers.

This statement comes amid recent reports that some retailers have been taking advantage of beneficiaries who withdraw their grants at retail stores rather than Post Office branches.

Postbank CEO Nikki Mbengashe briefed Parliament’s Committee on Communications and Digital Technologies, stating the bank is monitoring retailer agreements closely.

We have all five major retailers that we are working with; Boxer, Pick n Pay, Spar, Shoprite, and Usave. For us this is progressive because it means our customers have access,” she said.

However, Mbengashe acknowledged they are also “mindful and managing that relationship to ensure that the customer is not exploited by the retailer.”

Complaints have arisen that certain retailers are forcing beneficiaries to purchase goods in order to access their grant funds.

Mbengashe asserted, “We are hearing that in some areas there might be exploitation, we are busy reviewing our agreement with retailers to ensure that we are clear on that.”

Many beneficiaries have turned to retailers for withdrawals as Post Office branches have been plagued by technical issues, long queues, and poor service.

In September 2023, over 600,000 beneficiaries received late grant payments due to glitches in Postbank’s systems. KwaZulu-Natal beneficiaries were also recently advised to use retailers and ATMs amid Post Office disruption.

While these challenges have persisted, Mbengashe maintained that progress is being made to improve.

We are very aware of areas where experience is not optimal for customers. This includes cash pay points, some of which are needed because they are remote areas, however, the experience is not optimal for the customers, they have to sit outside, and sometimes there is no water.

“But we are making progress in ensuring that we channel them to channels that are convenient wherever we can,” she stated.

Mbengashe revealed that Postbank still has around 10 million active customer accounts. She touted this as an “admirable number” that commercial banks take years to achieve.

The CEO also addressed allegations of corruption that recently came to light.

Audits found millions were paid to Postbank service providers without valid contracts and proper procurement processes.

In response, Mbengashe said, “The business has dismissed five employees, six disciplinary processes, four voluntary resigned, two suspended and investigations are ongoing. The voluntary resignations are an indication of the start of a new culture of consequence management emerging in the bank.”

Earlier, Postbank’s entire board and chairperson resigned preemptively to avoid accountability, but government officials called this out as unlawful conduct.

In summary, while Postbank continues facing service issues, exploiting beneficiaries is unacceptable. Mbengashe says Postbank is reviewing retailer agreements and dismissals show it is instilling a culture of accountability.

The bank must streamline grant distribution and prevent beneficiary exploitation.

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