A safer alternative to Mashonisa loans in South Africa

If you’re looking for a Mashonisa loan, there may be a safer way to get the short-term funding you need.

Lamna doesn’t provide Mashonisa loans.

We provide regulated asset-backed loans, a form of alternative lending that lets you borrow against an asset you already own. Your car, gold and precious metals, luxury watch, artwork or another suitable asset can be used as collateral.

You don’t have to sell it. Once you’ve repaid the loan and agreed interest, you get your asset back.

And because the loan is secured by the asset, a poor credit history or being blacklisted doesn’t automatically prevent you from applying.

Lamna is a registered South African credit provider (NCRCP7428), so you’re dealing with a regulated lender and a formal loan agreement. The terms and costs are agreed before you borrow.

For anyone considering a Mashonisa loan, this is a better alternative.

What we offer at Lamna

Lamna provides short-term asset-backed loans to individuals and businesses with suitable assets they own outright.

The amount you can borrow is based on the assessed value of the asset you provide as collateral. That could be a paid-off vehicle, precious metals, gold, diamonds, a luxury watch, artwork or an antique. We also consider motorbikes, trucks, boats, yachts, aircraft and some other movable assets of sufficient value.

You give us the details of your asset and we’ll provide an initial indication of what you may be able to borrow. If you want to go ahead, the asset is appraised and we make a formal offer.

The vast majority of Lamna clients receive their money within 12 to 24 hours of applying.

The advantages without the risks of informal lending

Asset-backed alternative lending gives you a formal way to borrow money against something you already own.

With Lamna, the value of your asset determines the loan amount. Interest is calculated in line with National Credit Guidelines and set out in your contract, so you know the terms before you commit.

Your asset is kept in a secure location under constant surveillance while the loan is active. All assets are insured while they’re in Lamna’s care.

Once the loan and interest have been repaid, the asset is available for you to collect. You get access to money linked to something valuable without having to sell it permanently.

What are the risks of Mashonisa loans?

One of the biggest concerns with informal lending is uncertainty.

Interest charges can be high. There may be extra fees or penalties, and a borrower can have fewer practical avenues for resolving a dispute over the amount owed or the way a debt is collected.

Collection practices can become a serious problem too. Investigations into informal lending in South Africa have reported intimidation, social shaming and the seizure of borrowers’ possessions.

And because these arrangements take place outside the regulated credit system, you may have far less protection if something goes wrong. Quick access to money can become very expensive if the repayment terms aren’t clear from the start.

How asset-backed lending works

The idea behind an asset-backed loan is pretty simple. Something you already own provides the security for the money you borrow. That changes the way the loan can be assessed. Instead of basing the amount on your salary or credit score, Lamna looks at the resale value of the asset.

An expert appraiser assesses its age, condition and market value. Lamna then uses that assessment to determine the loan amount it can offer you.

If you accept the offer, you enter into a loan agreement and the funds are transferred to you. Your asset is held securely until you’ve settled what you owe.

Your asset is collateral. You don’t sell it.

Selling a valuable asset can solve an immediate cash problem, but it also means giving up the asset for good. An asset-backed loan works differently.

You remain the owner while the asset is used as collateral. Lamna holds it securely during the loan period, and you get it back once the loan and agreed interest have been settled.

That can be useful if the asset has sentimental value, if you expect its value to increase or if you simply don’t want to part with it permanently.

There is a responsibility attached to using collateral. If you don’t meet your obligations under the loan agreement, the asset may ultimately be used to recover the outstanding debt. Make sure you’re comfortable with the costs and repayment terms before you borrow.

Can I get an asset-backed loan if I’m blacklisted?

A poor credit record can make borrowing from a bank difficult. Having an asset can give you another option. So being blacklisted doesn’t automatically prevent you from applying for an asset-backed loan.

Lamna bases the amount it can lend on the independently appraised value of your collateral rather than your credit rating. Your asset must belong to you and be fully paid off.

This makes alternative lending worth considering if conventional credit isn’t available to you and you have a suitable asset you can use as security.

Do I need a good credit score for an asset-backed loan?

Your credit score doesn’t determine how much Lamna will offer you. The loan amount is based on the asset’s value. Its type, age, condition and likely resale value are assessed before an offer is made.

This is one of the reasons asset-backed lending can work for people who struggle to qualify for conventional finance.

What assets can I borrow against?

Lamna accepts a wide range of movable assets as collateral for asset-backed loans, including:

• Cars and other fully paid-off vehicles
• precious metals, gold and diamonds
• Luxury watches
• Artwork and antiques
• Motorbikes
• Trucks
• Yachts and boats
• Aircraft

Assets must belong to you and be fully paid off. Lamna doesn’t accept property or property deeds, stocks and bonds, electronic equipment or firearms as collateral.

Looking for an alternative to a Mashonisa loan?

If you’ve arrived here because you’re considering a Mashonisa loan, check whether the value you need is already sitting in something you own.

A paid-off car, luxury watch, gold and precious metals, artwork or another suitable asset could give you access to an asset-backed loan, even if your credit history makes conventional borrowing difficult.

You’ll be dealing with a registered South African credit provider, your loan terms are set out in an agreement and your asset is securely stored while it’s being used as collateral.

And once you’ve settled the loan and interest, you get it back.