Years of indebtedness have finally come to an end for respected Ga-Luka traditional leader David Petlele thanks to Anglo American Platinum’s financial wellness programme.
As a father of five and bread winner for his family, pressure to provide for his family quickly became unmanageable for David as the needs of his family continued to grow. The worst part about this scenario is that it’s all too familiar for too many South Africans across the country. “It all started a few years ago with the purchase of my second car,” explains David. “It seemed like a great deal at the time but I soon found myself struggling with the repayments. That, and needing to pay for my children’s tertiary fees, led me to take out my first loan.”
Like David, a growing number of South Africans are struggling with crippling debt, which explains why South Africans were recently ranked as the world’s biggest borrowers in the World Bank’s 2014 Global Findex Database study.
In principle, it’s hard to criticise borrowing if it is managed responsibly and consequences are properly understood. The reality is that most people are exploited by irresponsible lenders who frequently circumvent the law or capitalise on people’s desperation or often limited understanding of personal financial management.
Anglo American Platinum took the decision to tackle the issue of indebtedness by enlisting the assistance of a service provider to develop personalised debt relief programmes for its employees. The programme enables employees to regain control of their finances and alleviate the negative impact that debt has on their lives.
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.
“Living with debt put immense strain on my family,” says David. “There was constant tension between my wife and I, and my children were too young to understand why we couldn’t afford to have what other families had. To finally be in a place where all of this is behind me really feels like a dream come true.”
Anglo American Platinum noticed that it is garnishee orders that exhaust much of indebted employees’ salaries. Garnishee orders are court orders issued by credit providers compelling employers to pay debit debt instalments directly from an employee’s salary. Studies at Anglo American Platinum show that the majority of garnishee orders issued towards its employees are from micro lenders and financial institutions offering small loans.
Andile Sangqu, Executive Head of Anglo American in South Africa says, “While employee indebtedness is a national issue prevalent across the pay scale, the mining industry is particularly affected. It is for this reason therefore that, as a group, we took the decision to launch a programme that will see our employees fully rehabilitated from debt. By helping them reduce and eliminate their debt, we believe that the quality of their lives and that of their families will improve.”
With what seemed like endless garnishee orders on his salary, David had to put his home improvement project on hold. This meant that he was no longer able to build a suitable home for his large family.
Since the programme David has received much needed financial relief after 17 years of working at Anglo American Platinum. He was finally in a position to able to continue with his building project and now has the pleasure of being the owner of a newly renovated home which stands proudly on a dusty road in Ga-Luka.
Since the inception of the programme, Anglo American together with its partners have 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 households. 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.
“Following the completion of the financial wellness programme, I am proud to say that I am now debt free. I just finished building a home for my family, which has been a lifelong dream of mine. There is joy in my home, I’m a new man looking forward to retirement,” ends David.