I would like to clarify a number of incorrect statements and misrepresentations made in Terry Bell’s Inside Labour column, entitled “When it comes to wonga, beware of legal mashonisas” (Business Report, September 20).
Wonga is a registered credit provider that complies fully with the National Credit Act. We have spent an enormous amount of resources and energy to ensure that we are 100 percent compliant with the act and to compare us or even suggest we are the same as mashonisas, who clearly act illegally and are unregistered, is irresponsible.
Wonga offers small, short-term loans online to consumers in living standards measure 6 or higher, so we are not, as you suggest, “ruthless exploiters of the poorest and most vulnerable of income earners”. Our fees are prescribed by the National Credit Act, and interest is charged at 0.166 percent a day for the duration of the loan. These costs are set out on our home page, as is the total an applicant will have to repay.
Our model allows our customers to choose how much they want to borrow and for how long. First-time customers can borrow up to R2 500 for up to about 40 days.
Since we only make money when the loan is paid back, it is not in our interest to tie people in to long-term debt. We only lend to customers who we believe can afford to pay us back without any additional financial stress, and we carry out rigorous credit checks; so rigorous that we reject 75 percent of applications and our arrears numbers are in single digits.
At Wonga.com we believe in being transparent; www.openwonga.com is a website and digital information hub that we launched with transparency in mind. It is a place for us to share statistics about our service and engage with our customers and anyone else who wants to get a broader understanding of Wonga.com.
I would appeal to Mr Bell to focus his energies on the real problems in the lending sector. We are as concerned as he is about unscrupulous and exploitative practices. Unlike many lenders, we do not offer credit life insurance because we believe it is unethical and we support all efforts by the regulator to root out unscrupulous lenders.
Irresponsible journalism like this is no better than those irresponsible lenders who are extending credit in an unregulated manner to all and sundry.
Chief executive, Wonga.com SA
Let union pay miners’ legal fees, not state
John Capel, in his column Justice Denied (September 18), wrote that the state should pay the Marikana miners’ legal fees.
The miners were not on state business, nor were they acting in the course of their duties. They were on a strike called by their union – therefore, on union business. This is an enquiry, not a court case, and the state is not required to provide legal representation for outside parties who wish to attend. If and when it comes to a court case, the families of the miners cannot claim their breadwinners were sitting peacefully on a hill and the police were told to clear the hill.
It is obvious from the video the miners attacked the police while they were holding a watching brief. Also bear in mind that in the previous week, 10 security personnel, including police, had been killed by those miners, and the police were backpedalling and shooting to defend themselves.
While I feel sorry for the families, the miners brought this on themselves. There is no reason the state, that is, the taxpayer, should bear the cost. Let the union pay.
State intervention sets up dual economy
Business Report’s article from Bloomberg on September 16, regarding proposed changes to the 2002 Mineral and Petroleum Resources Development Act, refers.
Former president Thabo Mbeki was one to regularly harp on the dual economy that mirrored the strong lines of division of South African socioeconomics. His message was overtly political: until resolution was found to alleviate the conditions of the poor, disenfranchised sector, spawned by the apartheid legacy, the country’s future was fundamentally flawed.
But there is another dual economy, essentially economic in nature, where the excessive involvement (or not) of the government throws in contrast economic outcomes. This dual economy is represented on the one hand by those industries that have come under government scrutiny and ad hoc legislation and, on the other, those that have not. The first group is led by our resources sector, where government interference has curtailed investment and growth and created huge uncertainty for prospective investors. The health sector and labour services arguably also fall into this camp.
On the other hand, we see consumer-driven corporates that continue to thrive despite problems in the economy, such as SABMiller, Naspers, MTN and Shoprite. By virtue of their focus on the consumer as customer and no or little reliance on the government, they have grown profits, expanded or acquired new businesses, and diversified internationally. The happy consequence has been increased tax collection to the fiscus, job creation and foreign exchange earnings.
One may ask: is Adam Smith’s “invisible hand” of reasonably unfettered business activity not something the ANC government needs to revisit if it wants a winning nation? We have the moral and legal imperative of black economic empowerment implementation which has, by and large, been adopted in the corporate environment. Affirmative action sees a number of our blue chip organisations being led by credible black chief executives with appointments of previously disadvantaged individuals inexorably filling more senior ranks in the organisational pyramids as we develop as a nation. Therein lies the beauty of the free enterprise system despite its shortcomings. With stuttering steps, it seeks out and delivers the maximum good for the maximum number of members.
Maybe such a mindset will be adopted by the government before too many years are spent on tinkering with outdated and unworkable command economy thinking.
Davies is right to focus funds on job creation
I read Ntuthuko Shezi’s open letter (September 16) to Trade and Industry Minister Rob Davies with interest. His defence of the Khanyi Dhlomo Luminance funding debacle, which saw the National Empowerment Fund approve a loan of R34.1 million for a luxury boutique that imports finished goods from other markets, is absurd.
Shezi argues that the Luminance deal is important as it allows black entrepreneurs the opportunity to thrive in what is otherwise a lily-white high-end retail space.
But this begs the question: what is the use of funding a few “get rich quick” deals for a few elite black businesses when this does not translate to jobs for the majority of black people who are still on the margins of economic development?
Minister Davies knows better than to expect altruism from business. There is no wrong in insisting that if you are going to need the government to realise your profits, you should be willing to meet it halfway in confronting some of the challenges, such as the crisis levels of unemployment.
For years we have been talking about an inclusive growth path that will be a solution to the challenges of poverty, inequality and unemployment. The manufacturing sector plays a pivotal role in alleviating unemployment and poverty. Despite its importance, the sector has been plagued by challenges, and some can be attributed to an increase in competition and imports. The minister’s call bodes well for our manufacturing industries and workers whose jobs are forever on a knife’s edge.
If we are to fight the increasing rate of poverty and unemployment, it is imperative the government increases efforts to invest in and empower value-adding and job-creating initiatives. Minister Davies should be supported because we cannot afford to spend money funding initiatives that only thicken the wallets of a few black individuals without solving our jobs crisis.
Gauteng Department of Economic Development