Parliament's Trade, Industry and Competition and Finance committees will meet with major South African banks in February to scrutinize their credit lending practices. The committees aim to understand how banks allocate credit for both consumption and production purposes and assess their contribution to economic transformation. The focus comes after concerns were raised about the ease of accessing credit for personal purchases like cars and houses, while business ventures struggle to secure funding.
CAPE TOWN - South Africa 's largest banks will face scrutiny from Parliament next month regarding their credit lending practices. The portfolio committee on Trade, Industry and Competition, alongside the Standing Committee on Finance, will convene a meeting with major banking institutions in February. Members of the committees are prepared to question the banks extensively about their lending operations.
Chairperson of the Trade, Industry and Competition Committee, Mzwandile Masina, stated that the committees aim to gain a comprehensive understanding of the banks' credit lending practices for both production and consumption purposes. They also seek to assess the banks' progress in contributing to the transformation of the South African economy. Masina explained that the meeting with the banks is a fact-finding mission, driven by observations made by the two committees following their consultations with the National Credit Regulator, National Treasury, and the Competition Commission late last year. He confirmed that the Banking Association of South Africa and key banks, including Absa, Capitec, FNB, Investec, Nedbank, and Standard Bank, have confirmed their attendance. Masina highlighted a concerning pattern: 'We were noticing patterns that in the main, it was easy to access consumption credit for you to buy a car and to buy a house.' However, he pointed out that this credit accessibility does not extend to business ventures, characterizing this lending approach as disempowering. 'We have a responsibility on behalf of the people to call these banks so that we can get to understand,' he stated. Masina emphasized that the purpose of the meeting is to ensure that the banking sector in South Africa remains 'open, transparent and of service' to the most vulnerable members of society.
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