It is hard to ignore the attention that mashonisas have been getting of late. But what is the truth behind the headlines? Why are South Africans turning to mashonisas? Does this signal a gap in personal financial services, or is this an example of exploitation? Let’s examine what role mashonisas are really playing is South African’s personal finances.

The fact that mashonisas are not authorised to lend money to people, has led many to assume that they are a negative force. Whilst the need for regulation of any service, particularly when it comes to finances, cannot be denied, the question of why mashonisas are being used remains.

Due to changes in personal lending introduced in 2005, for many, mashonisas have become the last resort when they cannot access authorised lending providers. Learn more about the impact of recent changes on the rise of mashionisas at Wonga South Africa.

Like many unauthorised services, there are many things that have been said about mashonisas, but what is the truth?

It is true that illegal activities do attract a selection of less appealing characters who will act in an undesirable manner. However recent research has shown that many mashonisas are in fact, legally employed, working members of less well-off local communities. Aged between 27 and 48, these are workers who have come into some additional money and decided to use it as a source for informal money lending, lending sums at interest rates of 30-50%.

Indeed, rather than the sensational tales of violence that have been touted around recently, research carried out with those who have used mashionsas in the past, suggested that most interactions went smoothly.

On occasions where borrowers did incur any negativity, it was to endure a sense of shame from their community and rudeness from their lender. On reflection, because this is a service, it makes sense that mashionsas would want to retain their customers. Although, on the other hand, it could be the case that borrowers may be reluctant to report incidences of violence.

All in all, with mashionsas filling a gap in emergency financial provisions that is needed by so many, is this really as grave a situation as some parts of the press seem to suggest? If not mashionsas, then where can these borrowers go when they have a financial emergency?

Thus, the debate will roll on, however, until either the cost of living begins to fall or other authorised options are introduced, it is reasonable to predict that mashionsas will continue to exist.