SACP Statement on the Rise in Unsecured Loans
The SACP is quite affronted by the dismissive attitude that has been adopted by the Reserve Bank in relation to the crisis of reckless and unsecured lending confronting the country. The SACP was one of the first organisations already last year to raise this matter and we were confronted by a know-it-all attitude of the Deputy Governor, Lesetja Kganyago.
As the SACP we are strongly of the view that it is irresponsible of the Reserve Bank to adopt such a careless approach towards the ballooning of unsecured loans. Already some of the banks, like the African Bank, are admitting that they are facings problem in this regard. It is dangerous for the Reserve Bank to try and protect the image of our banking system through denialism. The SACP calls for an urgent and full-scale investigation into the causes and extent of unsecured lending, and for appropriate action to be taken to deal with the problem.
To our surprise in his budget speech this year the Minister of Finance echoed our sentiment and outlined measures to be undertaken to deal with garnishee orders abused by those who lure the poor with unsecured loans. This time around the Deputy Governor and his equally dismissive friends at the Banking Association of South Africa met the announcement with less arrogance. But they continued digging their heads in the sand and not providing much needed solutions to the poor.
The SACP is of the view that there remains a need for a major and much more comprehensive strategy to address ballooning unsecured credit, particularly where this involves preying on the vulnerabilities of working people and the poor.
The denials by the banks and the reserve bank are nothing else but making excuses in an effort to continue to deeply financialise our economy and allow the banks and lenders a license to freely ruin our economy. Reckless lending by the banks and micro lenders constitute a crisis that has to be tackled before our economy is plunged into a crisis.
Statement issued by Malesela Maleka, SACP Spokesperson, May 29 2013
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