FSCC and SACP: JOINT STATEMENT ON THE AFRICAN BANK CRISIS
Sunday 10 August 2014
The Financial Sector Campaign Coalition (FSCC) and the South African Communist Party (SACP) have learned with shock, but not surprised, by the news of the loss of market value experienced by African Bank. We are shocked because the regulators, the South African Reserve Bank in particular, "assured" us that there was nothing untoward when we raised concerns about the business model of African Bank, reckless and unsecured lending practices. We are not surprised because we both warned and campaigned against reckless and unsecured lending - financial practices that cause debt trap and distress in households and crisis in the economy.
The FSCC and SACP raised concerns in 2012-13 with the rise of unsecured lending. We were also and remain particularly concerned with the methods of debt collection by the unscrupulous lenders. The National Credit Regulator (NCR) had to step in and investigated the African Bank, which it found guilty of reckless lending practices. Having dared to move into this space and speak truth to the financial powers that be, they are to date, still paying the price of their bravery. The NCR's powers have been curtailed through twin peaking model, their budget was reduced by 40%, and they are unable to carry out their mandate without hindrance.
When the Chairperson of the FSCC and SACP 2nd Deputy General Secretary Comrade Solly Mpaila took to the public to raise the concerns regarding the business practices of African Bank he was laughed off as an alarmist by none other than Mr Lesetja Kganyago, Deputy Governor of the Reserve Bank. In his usual condescending attitude, he even invited the FSCC for tea in an attempt to explain what the coalition "did not understand". Today, the beast is in the open, African Bank's model is collapsing and millions of consumers are left exposed.
Where is Mr Kganyago?