It’s a story too many South Africans can identify with: a sole breadwinner, three children to raise and an unemployed spouse. This is how Sarah Motuku found herself on the receiving end of numerous bank loans and the trappings of never ending debt.
With endless garnishee orders from debtors, the prospects of financial freedom seemed unattainable for Sarah. This was until she encountered Anglo American’s Financial Wellness Programme.
Many South Africans find themselves over indebted. The advent of instant personal loan services available online, in stores and even through mobile services, have made it all too easy for people to find themselves in this hole.
“As a mother, providing for your children is one of the most important things. Not being able to do this is demoralising and really affects the family negatively,” shares Sarah.
“When I got a job at Anglo American Platinum in 2007, I thought that was my big break and I would finally be able to provide for my family. Unfortunately the demand on my salary was too high with my children, husband, parents, siblings, nieces and nephews all depending on me for support. It was then that I applied for my first loan and before I knew it I was struggling to keep up with the repayments.”
Sarah’s responsibilities did not end here. As a member and shop-steward for the United Association of South Africa (UASA) trade union for five years, Sarah has been a role model and go-to-person for her colleagues who often seek assistance from her.
To address the issue of indebtedness, Anglo American Platinum enlisted the assistance of a service provider to develop personalised debt relief programmes for its employees. The programmes enable employees to regain control of their finances and alleviate the negative impact that debt has on their lives.
One of the key drivers of indebtedness in the mining industry is garnishee and administration orders. A garnishee order is a court order that compels an employer to pay debt instalments from an employee’s salary straight to their credit providers. Studies at Anglo American Platinum show that the majority of garnishee orders are from micro lenders and financial institutions offering small loans.
Andile Sangqu, Executive Head of Anglo American in South Africa, explains, “As a group we’re committed to the wellbeing of our people and are concerned about the devastating effects of excessive indebtedness in South Africa. As one of the country’s major employers, we have a responsibility to help our people free themselves from debt and avoid the snares and consequences of irresponsible lenders altogether.”
The financial wellness programme is part of a larger undertaking by Anglo American to address the indebtedness of its employees across the group. The company has enlisted a number of service providers, which will make available the appropriate systems, processes and education to enable employees to deal with high levels of indebtedness, and undertake responsible financial planning.
“This financial wellness programme is the best thing that has ever happened to me,” exclaims Sarah. “For the first time in my life my salary is all mine. I’m able to provide for my household, support my parents, siblings and their children, and still have a surplus to spoil my kids and myself. I feel like I have been given a new lease on life and I’m so thankful.”
“After seeing the results for myself, when my colleagues me ask for help as their shop-steward regarding finances, I can comfortably refer them to the programme. I know that if Anglo can do it for me, they can do it for anyone.”
Since the inception of the programme, Anglo American together with its partners has helped employees save over R3 million, which would otherwise have been consumed by garnishee orders. By removing the administrative burden of managing garnishee orders, the programme ensures that only valid, accurate and affordable deductions are established, putting money back into employees’ pockets and ultimately their homes. The financial wellbeing solution has managed to reduce debt commitments from 54% to 28% of net income, resulting in a monthly improvement to disposable income of roughly R3, 000 per month per employee accessing these solutions and a total monthly reduction of debt commitments of R1,3 million.
“My family is happier, I feel more at peace and enjoy my work and life more. I feel like a new person and it’s all thanks to Anglo American Platinum and Summit,” concludes Sarah.