Chairperson of the Portfolio Committee on Small Business Development, Ms Ruth Bhengu, has called on Cooperative Financial Institutions (CFIs) to demand a 30% share in social grant distribution.
Bhengu said the 30% share is in line with a cabinet resolution of 2007 and the commitment made by former President Mr Jacob Zuma in his 2015 State of the Nation Address. In that address, Mr Zuma announced that government will set aside 30% of some categories of state procurement for purchasing from small, medium and micro enterprises, co-operatives, and township and rural enterprises.
She said the committee will request a meeting with Susan Shabangu, Minister of the Department of Social Development, to discuss the matter.
“All that is needed is to allow Minister Shabangu to familiarise herself with the concept of cooperatives and understand how people organise to provide themselves with a service, instead of depending on other service providers. The time for CFIs to occupy their rightful place has arrived,” Ms Bhengu said.
She emphasised that organised community structures are a better channel for distributing social grants in a manner that will contribute to socio-economic development and provide impetus to the establishment of community-owned enterprises.
The committee plans to invite the National Cooperative Association of South Africa and the National Association of Co-operative Financial Institutions of South Africa to engage with them on this matter, in order to assess their state of readiness to enter the social grant distribution market.
Bhengu said the CFIs intervention will be a productive way to eradicate poverty, rather than sustaining it and commercialising the misery of the poor, whereby companies such as Cash Paymaster Services continue to dominate the distribution of social grants.