The SA Communist Party says the entire financial sector, including banks and insurance companies, remains untransformed and unaccommodating to black people.
SACP spokesperson Alex Mashilo said the situation required “de-monopolisation” through the establishment of several state-owned banks that could represent different sectors of the economy, as existed in China.
“We must de-monopolise the entire financial sector, including the insurance sector,” he said, adding that there was still no state bank in South Africa to serve the people.
Black Farmers’ Association of South Africa (Bfasa) president Lennox Mtshagi called on the government to enforce the principles of economic transformation.
“We, as Bfasa, continue to seek unfettered SA government support to realise the objectives of our organisation and true economic transformation,” Mtshagi said.
However, the Banking Association SA (Basa) insisted its members were opposed to discrimination in all forms, just as it did during a related portfolio committee meeting in 1999.
“In cases where there are credible and specific allegations against a member bank, the matter must be taken up with the bank and the relevant authorities. Those that feel discriminated against have recourse to the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (Pepuda),” said Basa.
The trade and industry portfolio committee had heard in 1999 that the commercial banking sector was failing to provide an adequate service to the bulk of the South African public, and as a result, the poorer and mostly black populace was given limited access to “savings, transmission and credit facilities”.
A direct effect of this under-servicing is the mushrooming of formal and informal microlending practices. Research shows that some borrowers are being charged about 30% interest per month on a loan. The repo rate at the time of writing is 4% per annum, and the prime lending rate of commercial banks is currently at 7.5%.
Andile Mngxitama, leader of Black First Land First (BLF), raised concerns about leaders of the governing party who have conflicting interests in the financial sector.
He said banks were serving the interests of the capitalist monopoly, and various political parties were beholden to the ruling class as “banks fund all major political parties”.