BASA has hit back at recent claims by Minister Mmamoloko Kubayi, arguing that banks’ loan rejections stem from affordability and credit issues, not racial discrimination.
The Banking Association of South Africa has refuted recent claims by Human Settlements Minister Mmamoloko Kubayi about a high prevalence of discriminatory practices relating to the application process of home loans.
According to her Department, from 2018 through 2022 lenders received about 6 million applications for loans. “Allegations of unfair discrimination by banks remain unfounded and are frankly irresponsible,” said the association. According to the association’s members, 48% of home loans are declined because of a lack of affordability; 34% because of an adverse credit record and 13% because of unacceptable security.
However, “it remains primarily the responsibility of government to create an enabling operating environment, so that companies can grow and create jobs, allowing South Africans to meet the affordability requirements set out in law,” they added. BASA suggested that the DHS should rather aid in overcoming affordable housing challenges in South Africa by providing government land for development, streamlining deeds registration to lower consumer costs, and speeding up service delivery.
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