11 February 2002
The South African Communist Party (SACP) strongly disagrees with the statement by the Banking Council of South Africa that the liquidity problems faced by Saambou Bank are an isolated case. In the view of the SACP, the Saambou developments (which follow similar problems experienced by the ABSA-owned Unifer) are a reflection of deep structural problems in the financial sector in our country. In fact, these developments vindicate what the SACP has been saying about the fact that the private-sector dominated financial sector in our country is characterised by greed for maximum profits at the expense of economic growth and development.
The logic of maximising profits explains why we have seen the hurried entrance into the micro-lending industry by the major private commercial banks in our country. It is this greed which has resulted in extremely high interest rates charged by the micro-lending industry leading to thus unsustainable levels of overall indebtedness of the majority of ordinary working and poor people in our country. In fact, the official interest rate set by the Reserve Bank is only academic and not the reality of what the majority of our people are charged by the micro-lending industry.
The SACP therefore reiterates its calls for the effective regulation of the micro-lending industry, the curbing of interest rates and the establishment of community owned co-operative banks with affordable and accessible credit and interest rates. And thus the urgency of the setting of a date for the NEDLAC Summit on the Financial Sector. The SACP has, since October 2000, called for the holding of this NEDLAC Summit in order to transform and diversify the financial sector in our country. The NEDLAC Summit must also take forward the demand for the development of a legislative framework for the regulation of the micro-lending industry and the establishment of co-operative banks.
CONTACT
Mazibuko Kanyiso Jara (surname Jara)
Department of Media, Information and Publicity
South African Communist Party
Tel - 011 339 3621
Fax - 011 339 4244
Cell - 083 651 0271
Email- sacp1@wn.apc.org