Grootfontein to confine Redforce role to corporate defaulters
Residents spared the rod - for now
Despite signing the contract in April, the company has not been deployed yet, amid serious pushback from residents at the town.
After delaying the commencement of Redforce Debt Management's services at the town for over two months, the Grootfontein municipality has resolved to confine the company’s role to defaulting businesses, organisations and government institutions – sparing residents the rod for now.
Mayor Talitha Garises told Namibian Sun that this decision was made after backlash from the town’s residents during a series of meetings. held to educate them on why they should pay their municipal accounts - or risk being handed over to Redforce.
The cash-strapped municipality signed a contract with Redforce on 5 April after all avenues to recover over N$213 million owed by residents and stakeholders had been exhausted. The debt-collection company was expected to commence operations in May, but due to pushback from the community, the municipality placed the contract on hold.
However, during yesterday’s interview with Namibian Sun, Garises said the council, which has put the agreement on ice for the second time, will not do so again.
“Redforce will start on 1 August and they will start with those who owe us millions. These are the businesses and government who are not paying us for services rendered,” she explained.
“The residents will not be handed over as of yet. We are busy with community meetings where we are informing the residents of how important it is to pay for the services they get from the municipality. We are also encouraging them to visit our offices and pay what they can and also enter into agreements.”
Prolonging financial hardship
Grootfontein residents have made it clear that they want the agreement between Redforce and the local authority terminated.
In a petition, residents raised concerns about their properties being repossessed and their lives being made miserable by no-nonsense Redforce, which pursues its terms of reference with local authorities to the letter. There are also allegations that residents were not consulted regarding the company’s appointment.
“Redforce has the potential to prey on individuals in dire financial circumstances, charging exorbitant fees for services that are often available for free or at a much lower cost through normal municipal debt-collection channels,” the petition read.
“Instead of offering sustainable solutions to debt problems, the Grootfontein municipality is pushing the community into repayment plans that will prolong their financial hardship or even worsen their debt burden in the long-run.”
Not Redforce’s fault
Addressing the opposition to Redforce’s deployment at various local authorities recently, Landless People’s Movement (LPM) leader Bernadus Swartbooi said the company is simply fulfilling its contractual mandate as a business entity deployed to collect debts from defaulters.
“Why did Redforce come into being? The Redforce people are smart businesspeople who saw a gap in the market, where local authorities were struggling to collect revenue. Why? Because local authorities could not often pay people to collect debt because their departments were overwhelmed,” he said.
“Local authorities did not have the money necessary to employ more people. So, they said let's outsource. Every tier of government has outsourcing. And so local authorities also outsourced. And the collection ratios in respect of local authorities doing their collection themselves versus [collections by] Redforce, the difference was visible.”
He added: “Redforce aggressively pursued the mandate they were given by the local authorities. Not their own mandate, but the mandate they were given by the local authorities to go and collect money.”
Swartbooi added that it was up to local authorities to relax the mandate given to Redforce, if it was deemed too aggressive.
“If the local authorities wanted the Redforce to go softer, then they should have told them to go softer in terms of revenue collection. Suddenly everyone is fighting Redforce. Redforce is now the scapegoat.”
Reduced funding to blame
The former lands deputy minister said reduced funding of local authorities by government was to blame for the methods deployed against municipal defaulters.
“We must ask the question why did local authorities, post-independence, have a reduced capacity for revenue collection? It's because the funding to local authorities went down," Swartbooi said.
“It's because that funding went down that local authorities could not employ the scale of people that were necessary to do revenue collections. That's what happened.”
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Mayor Talitha Garises told Namibian Sun that this decision was made after backlash from the town’s residents during a series of meetings. held to educate them on why they should pay their municipal accounts - or risk being handed over to Redforce.
The cash-strapped municipality signed a contract with Redforce on 5 April after all avenues to recover over N$213 million owed by residents and stakeholders had been exhausted. The debt-collection company was expected to commence operations in May, but due to pushback from the community, the municipality placed the contract on hold.
However, during yesterday’s interview with Namibian Sun, Garises said the council, which has put the agreement on ice for the second time, will not do so again.
“Redforce will start on 1 August and they will start with those who owe us millions. These are the businesses and government who are not paying us for services rendered,” she explained.
“The residents will not be handed over as of yet. We are busy with community meetings where we are informing the residents of how important it is to pay for the services they get from the municipality. We are also encouraging them to visit our offices and pay what they can and also enter into agreements.”
Prolonging financial hardship
Grootfontein residents have made it clear that they want the agreement between Redforce and the local authority terminated.
In a petition, residents raised concerns about their properties being repossessed and their lives being made miserable by no-nonsense Redforce, which pursues its terms of reference with local authorities to the letter. There are also allegations that residents were not consulted regarding the company’s appointment.
“Redforce has the potential to prey on individuals in dire financial circumstances, charging exorbitant fees for services that are often available for free or at a much lower cost through normal municipal debt-collection channels,” the petition read.
“Instead of offering sustainable solutions to debt problems, the Grootfontein municipality is pushing the community into repayment plans that will prolong their financial hardship or even worsen their debt burden in the long-run.”
Not Redforce’s fault
Addressing the opposition to Redforce’s deployment at various local authorities recently, Landless People’s Movement (LPM) leader Bernadus Swartbooi said the company is simply fulfilling its contractual mandate as a business entity deployed to collect debts from defaulters.
“Why did Redforce come into being? The Redforce people are smart businesspeople who saw a gap in the market, where local authorities were struggling to collect revenue. Why? Because local authorities could not often pay people to collect debt because their departments were overwhelmed,” he said.
“Local authorities did not have the money necessary to employ more people. So, they said let's outsource. Every tier of government has outsourcing. And so local authorities also outsourced. And the collection ratios in respect of local authorities doing their collection themselves versus [collections by] Redforce, the difference was visible.”
He added: “Redforce aggressively pursued the mandate they were given by the local authorities. Not their own mandate, but the mandate they were given by the local authorities to go and collect money.”
Swartbooi added that it was up to local authorities to relax the mandate given to Redforce, if it was deemed too aggressive.
“If the local authorities wanted the Redforce to go softer, then they should have told them to go softer in terms of revenue collection. Suddenly everyone is fighting Redforce. Redforce is now the scapegoat.”
Reduced funding to blame
The former lands deputy minister said reduced funding of local authorities by government was to blame for the methods deployed against municipal defaulters.
“We must ask the question why did local authorities, post-independence, have a reduced capacity for revenue collection? It's because the funding to local authorities went down," Swartbooi said.
“It's because that funding went down that local authorities could not employ the scale of people that were necessary to do revenue collections. That's what happened.”
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