Black Businesses organisations have called for South Africa’s banks to be taken to the Equality Court and for a class action lawsuit against them, citing blatant discrimination towards black-owned entities.
This move is reminiscent of the bread cartel that was disrupted by Tiger Brands and Pioneer Foods when it was taken to the Competition Commission in a historical class-action lawsuit that found the cartel guilty of inflating prices, and the end result was that they had to pay billions of rand to rectify the situation.
Mntuwekhaya Cishe, the secretary-general of the Black Business Chamber (BBC), said South African banks were now in a similar situation and black businesses now wanted the banks to be taken to the Equality Court and the Competition Commission on allegations of discrimination and collusion.
“Black businesses are suffering, black people are suffering and the banks have done nothing to help us. The government has set aside R200 billion in Covid-19 support and according to the minister of small business, only R30bn was used, and 75 percent went to white businesses.
“A lot of black businesses have been destroyed. At the same time, many black people are unemployed or underemployed and the banks are not supporting them,” he said.
Cishe claimed that the banks targeted black people and businesses whom they disagreed with politically, using reasons such as reputational damage. “The Banks Must Fall Campaign showed the fault lines, by showing that many of white-owned businesses that have been found guilty of fraud and corruption and their directors continue to have bank accounts, but black companies and individuals have their bank accounts closed.”
Cishe said black-owned companies, professionals and individuals were under rigid scrutiny but the same was not done for white-owned entities.
“The BBC calls for an investigation into the conduct of the banks and an investigation into the role (if any) that the SA Reserve Bank may be playing through these banks.”
TransformRSA President Adil Nchabeleng said this matter was even raised by President Cyril Ramaphosa where he rebuked the banks’ behaviour. “I’m surprised that … there hasn’t been any action coming out of the banks’ R200 billion that was set aside to help alleviate the challenges faced by small businesses as well as ordinary South Africans.
“And that money today has not even been spent or directed by the banking institutions towards the black majority, as well as ordinary small, medium and micro-sized enterprises (SMMEs).”
Nchabeleng said South Africa had about 1 million registered SMMEs, but when Covid-19 struck many went under due to the lack of funding that was entrusted with the banks. “The banks were not willing to support these black businesses, and this is no surprise because these banks have shown several times that they are not interested in uplifting black businesses,” he said.
According to TransformRSA, the banks get money from two sources, the depositors – the majority of whom are black – and the rest from the Reserve Bank. The government is indirectly responsible for providing the banks with the money.
“We have suggested that they need to be taken to the equality court. A lot of people on social media have highlighted this and over 10 000 people have committed.
“It is the politicians who are making sure that banks continue to discriminate against black people. These people are given loans they never did anything for so they actually blackmail them to make sure that they never speak out against the ills of the banking institutions,” he said.
When reached, the Banking Association of SA said it and its members opposed discrimination in all forms and were committed to treating all customers fairly.
“In cases where there were credible and specific allegations against a member bank, the matter must be taken up with the bank and the relevant authorities, for proper investigation.”