A Cash Advance is a micro-loan facility made available to qualifying cardholders at any UEPS POS device installed at participating bank branches, merchant stores and micro-financier offices in urban, semi rural and rural areas. A key feature in the UEPS is its OFFLINE transaction processing ability. Cash Advance transactions are processed OFFLINE when requested by smart cardholders.
A Cash Advance is granted to an individual who is employed on a permanent basis. The reason for this requirement is to minimize the risk associated with Cash Advances (i.e. loans) made to these individuals.
A Cash Advance is a small loan and simplifies the normal process of obtaining micro-loans by taking the form of an advance granted by the employer to an employee based on their salary/wage to be paid. It also eliminates the need to visit and queue in banking halls, complete qualification processes and application forms, and dispenses with the need for the client to return a few days later in order to collect the micro-loan once approval has been granted.
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For the purpose of the UEPS Cash Advance functionality, the monthly income (salary/wage) loaded to the card over a period of three (3) consecutive months is used to calculate the average net income.
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Repayment amounts, including the financing bank’s finance charges, are linked against the smart card USN on the System Host. When the monthly data file is submitted from employers for the creation of 10-digit signature codes in respect of salary/wage payments, the system automatically detects repayments due for Cash Advances granted, and deducts these amounts from the net salaries/wages of cardholders before the creation of 10-digit signature codes for loading to smart cards. The full amount of each Cash Advance, including finance charges, is repaid monthly.
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A maximum percentage is set to limit the amount of the Cash Advance granted.
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The finance charge interest rate required for the calculation of the repayment amount due for Cash Advances must be approved by the financier and set on the UEPS System Host.
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Detailed MIS reporting is available for the financier to monitor:
- Total number and value of cash advances issued daily in their individual regions across the country
- Total repayments collected monthly outlining total finance charges levied
- Cardholders in arrears
- Statistics of age-groups using the cash advance product
- Frequency of cardholders using the cash advance product
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