Banks reach out to indebted miners

BR Loan shark 63991 Independent Newspapers Boitumelo Maise (left), the branch manager of Masasa, says that business has been slow since the strike began. Photo: Simphiwe Mbokazi

Johannesburg - Bank operating in the platinum belt say they have halted legal action against cash-strapped mineworkers and are on a campaign to reach out to them to restructure their debt.

The banks, who have had no income from the area, sent text messages to thousands of platinum-belt clients who have not received salaries since December, requesting them to visit their branches.

About 70 000 Association of Mineworkers and Construction Union members downed tools for five months for higher wages at Lonmin, Impala Platinum and Anglo American Platinum. The strike ended last week after a deal to increase wages by up to 20 percent was signed.

This week, African Bank said it had been giving R30 shopping vouchers to clients who qualified, as an incentive for them to visit its branches.

“We have not taken any legal action against the miners. They have been in a terrible predicament and new payment plans will only kick in after they start receiving salaries again,” Alfred Ramosedi, the executive for African Bank’s retail operations, said.

The bank launched the “care programme” to encourage miners to visit a branch for one-on-one consultations for tailored repayment terms, he said. African Bank has scaled down on its exposure in the platinum belt to 0.8 percent from 2.5 percent since the labour unrest in Marikana in mid-August 2012.

BR Loan Sharks 9151 Microlenders R&M (left) and Tlayang operate their businesses in Marikana, Rustenburg. Photo: Simphiwe Mbokazi Independent Newspapers

The miners risk having impaired credit records if alternative arrangements for servicing their debts are not made.

“We have put all legal action in the area on hold. We are calling our clients and sending text messages for them to visit our branches. We want them to tell us what is their situation and how we can reschedule their loans,” Charl Nel, the head of strategic communications at Capitec Bank, said.

The Sowetan reported that UBank urged miners to visit its branches to restructure their loans and avoid being blacklisted. About 25 percent of UBank’s revenue was derived from the platinum belt, the newspaper said.

Over-indebtedness among platinum-belt employees contributed to labour unrest in mid-August 2012, when it emerged that over-committed unsecured borrowers faced with irregular garnishee orders were reaching crisis levels.

National Credit Regulator (NCR) inspectors found “severe indebtedness” among miners, exacerbated by “malpractice by lenders and debt collection agents” during a visit to the area in 2012.

Although most microlenders were registered with the NCR, the inspectors found that many were in breach of National Credit Act regulations and criminal laws. Some were closed.

The Treasury also established a task team to investigate garnishee abuse and by the end of 2012 it warned that it was consulting with the Department of Justice with the intention of changing the laws governing garnishee orders.


sign up