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Important Context

Over the past 30 years, Sasfin has financed and supported numerous schools across the educational spectrum and enabled them and their learners to have access to the benefit of equipment which may otherwise have been unaffordable to them.  Sasfin’s South African Securitisation Programme (SASP), which has been in existence since 1991, funds the rental of equipment by clients across various industries and sectors. This rented equipment is critical to meeting our clients' operating requirements. The funding we provide through rental agreements enables them to procure their use of equipment which they may otherwise have to do without. The vast majority of our clients adhere to the instalment plans agreed upon and Sasfin experiences a very high degree of repeat business. This reflects the real need Sasfin fulfils.

Sasfin currently funds 3,993 schools. Of those, 1.87% have been referred to attorneys for recovery. In such instances, we generally are able to come to terms and agree on payment arrangements. At all times we remain cognisant of the need to avoid clients becoming over-indebted and we regularly review our practices for financing equipment for schools as we balance schools’ need for funding with responsible lending practices.

Tackling Fraud

Sasfin has put in place additional measures to reasonably ensure that the equipment rented by schools is both fairly priced and appropriate for the needs of the schools. This approach results in many deals being declined for the sector. While these steps are taken, it is extremely difficult to detect collusion between school officials and equipment suppliers. We insist that where governing bodies are in place that the rental agreement contains the support of the full governing body. At the moment, aside from St Peter Claver (mentioned in the article), there are no other allegations of fraud that have come to our attention.

As we did with St Peter Claver, our intention is to always address the issues with both the supplier and the client. Despite not reaching a final agreement in this instance, we have taken steps to reduce the impact on the school. In other instances where end users seek to avoid payment, we have an obligation to take the necessary steps to recover the funds that we have provided as we have a responsibility to the thousands of savers whose money is invested in SASP. 

Way Forward

Sasfin has taken steps to enhance its fraud detection processes over the years and we have had no new concerns raised by schools we have financed in recent years. Sasfin remains committed to supporting growth in our economy and, at the same time, addressing fraud and corruption. With this in mind, we will conduct an independent review to ensure that our fraud detection processes are appropriate and enhanced where necessary. Furthermore, our senior executives will reengage with St Peter Claver to ascertain whether an amicable solution can be found which works for all parties.

About the Author

Michael Sassoon
CEO, Sasfin Holdings Limited

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