Jan Mahlangu, retirement funds coordinator for Cosatu, speaks to us about the Financial Sector Charter.
Ownership aside, how, in your view, is the industry progressing in terms of the charter?
The charter is serving the industry well in terms of making profits and returning these to shareholders. Let us take one example, that of the loans being made available by banks to finance BEE transactions. Here they have done exceptionally well. We understand that by the end of 2007 they had already beaten the R50-billion 2008 target. They have performed well against this target because it is where they make money; it is very profitable for banks to lend to narrow-based BEE businesspeople at the high charges and interest rates that they apply.
In other areas, including employment equity, skills development and enterprise development, performance has been poor, even against the low targets of the charter.
Are there initiatives from the financial industry in terms of improving access or lending that you support?
We supported all the charter access initiatives and gave them a fair chance to prove that they would meet the access needs of the working class and the poor in our society. This includes support for access to banking, insurance, low-income housing finance and loans to resource poor black farmers.
However, we have been disappointed at implementation and what we see as the industry trying to draw back from the commitments they made in the original charter. We have had an uphill battle with the banks to finalise standards for access to finance. It seems they want to make as much profit as possible from access initiatives and we cannot be party to that.
What areas of broad-based BEE within the sector need more focus?
The industry has focused more on narrow-based BEE up to now and that is why we felt it was very important to align the charter with the codes. This would be important in ensuring that the focus on black ownership in future is on broad-based elements such as gender representation and cooperative entities.
Although we don’t think the codes are perfect, they are the law and alignment would help the sector focus more on skills development, employment equity, procurement, enterprise development and so on.
What products or services would you like to see introduced by the financial industry?
As labour, we would have liked the industry to introduce the products and services that they committed to deliver in terms of the charter. This includes housing finance that is appropriate for workers at affordable rates. However, the banks refused even to agree to set a standard for the affordability of housing finance for workers, let alone discuss other products and services that we would like to see.
We believe the opportunity through the voluntary charter has now been lost, but we would have liked to see the introduction of a programme to open banks in rural areas and townships throughout the country.
We would also have liked to see the extension of affordable credit to workers, many of whom still have to go to moneylenders, unlike workers in the rest of the world who can get credit from the same banks where their wages are deposited.