By Sipho Khumalo
Political Staff
The loan tap will soon be switched off for KwaZulu-Natal's elected public officials and their spouses who have received controversial loans from the Ithala Development Finance Corporation.
The policy, which kicks in on Tuesday, would affect MPs, MPLs, ministers, MECs, mayors and councillors who would now be barred from accessing funds from the provincial-funded bank.
The new measures - announced by Economic Development MEC Mike Mabuyakhulu, Ithala's political head, yesterday - come amid heightened pressure on the provincial government from the public and opposition parties to deal with perceptions that the bank was being plundered by politicians, who had allegedly taken loans of millions of rands without servicing them.
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These included an R11 million-plus loan
It has emerged that Ithala staff and their relatives had been given loans by the institution.
Mabuyakhulu announced that those who already held Ithala loans have until March 2010 to transfer their loans to other financial institutions.
The practice of "related-parties lending" triggered a public outcry when it emerged that politicians, including MPLs and leading Ithala officials, had taken loans from the bank, with no clarity being provided on whether they were servicing the loans.
These included an R11 million-plus loan extended to May Mkhize, wife of the then political head of Ithala, Zweli Mkhize, who is now the KwaZulu-Natal premier, and a R44m loan extended to Ntombi Shabalala, wife of the former head of the Treasury and the current Ithala CEO, Sipho Shabalala.
Former premier S'bu Ndebele was granted a loan, but he transferred it to another institution.
'There are too many other gaps that are open to abuse'
It later emerged that former Ithala CEO Sipho Nyembezi had also taken loans from the bank.
Ithala has battled with bad debts for several years because customers with accounts in arrears were not followed up.
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