By Feroza Petersen
IN April 2021, in an interview by veteran journalist Ashraf Garda on humanitarian journalism site SalaamMedia, with the leader of Transform SA, Adil Nchabeleng, Nchabeleng called for reform in the banking sector.
Fast forward to 2023 his message is as relevant now as it was then, as not much has happened in this regard as evidenced by the continued battle of the banks vs Sekunjalo.
During the interview, Nchabeleng articulated the stark reality of marginalised black South Africans whom, he believes, are systematically targeted by banks.
He expressed his outrage at the entrenched racism within South African banks and believed this to be a compelling reason for urgent change in the banking sector.
“Economic prosperity in South Africa is closely tied to the banking system, which is expected to provide financial support, loans, and essential financial instruments.
“But banks have consistently fallen short of their role by excluding the majority of black South Africans from financial access, subjecting them to predatory lending practices with exorbitant interest rates, and systematically denying them credit opportunities”, said Nchabeleng.
Nchabeleng whose group initiated the #racistbanksmustfall movement, also drew attention to a concerning practice – the shutting down of banking accounts belonging to successful black individuals and black owned and managed businesses.
Two years on, this observation is exemplified by the banks’ actions against the Sekunjalo Group, including Independent Media, under the pretext of a supposed “reputation risk” for these institutions.
Regarding so-called ‘allegations’ against the Sekunjalo Group, Nchabeleng emphasised in 2021 that: “no court of law has ever found the Group guilty of irregular trading”.
He argued that in contrast, other companies found guilty of misconduct have not faced similar consequences and remain banked. It is a fact equally true today as it was back then.
“There is a deliberate attempt to silence successful black individuals in South Africa who challenge mainstream views. Those who deviate from the status quo are often targeted, irrespective of their financial success,” he said.
Nchabeleng’s views on the mainstream narrative were equally pointed. He criticised it for stifling dissent and free expression, highlighting that Independent Media is a platform for diverse voices and investigative journalism that challenges the dominant storyline de jour.
The interview also delved into the disparities in how banks treat their white and black clients, especially in cases of loan defaults.
Nchabeleng revealed that banks have internal policies that result in higher charges and punitive interest rates for black, Indian, and coloured clients.
This, sadly, seems to follow a global trend, with the US-based Committee for Better Banks issuing a report, also in 2021, reflecting how in America, “racial bias runs deep” in the banks.
The same report highlighted how the chances for people of colour of being promoted to senior and executive roles within these institutions were far less favourable than their white counterparts.
The same racial profiling can be said for loan applications that still ask applicants to submit what race they are, which also plays a part in compiling credit scores.
The investment site Investopedia, also has an article, compiled in 2022, that reflects on the history of lending discrimination in the USA, whose archaic practices are eerily similar to what many South Africans still experience today.
One such practice included ‘redlining’ which denied people loans based on where they live and their ethnicity or race. Whether the Sekunjalo group companies are being denied bank accounts (most do not require loan facilities), based on their ethnicity or race is now the subject of a precedent setting discrimination case due to be heard in the Equality Court in the Western Cape.
Subsequent to Nchabeleng’s interview, there have been numerous articles and calls from many other political parties and South African citizens for a comprehensive overhaul of the entire banking system, even going so far as to advocate for its nationalisation.
The message is clear, whether you are a Sekunjalo supporter or not, it is time for the banks to be held accountable, and for an end to the predatory practices that have perpetuated racial inequality in South Africa for too long, and that serve to keep the majority of South Africans marginalised. It’s time to stop redlining.
WATCH NCHABELENG’S INTERVIEW HERE