Asief Mohammed, a senior member of the Financial Services Council (FSC), views the collapse of African Bank not as an isolated case of a good business which went bust but a disaster that was bound to occur at some point.
In an article urging the banking sector to be committed to undertaking fundamental racial and moral transformation, Mohammed argues that the collapse of African Bank reflects a financial services sector that is not committed to conducting business in a ‘sustainable and responsible’ manner that benefits consumers. He believes an ethical approach that banks could be providing customers with value-for-money products and services.
Mohammed cites a number of cases to substantiate the perspective that, in general, the financial services is not committed to extending its services to the lower income earners.
On insurance companies, he notes: “The insurance industry has yet to come up with packages aimed at low income earners, even though technology has made this possible.”
Another example that Mohammed mentions of a financial sector half-hearted about transforming itself is the practice of banks authorising ‘debit order” deductions from the South African Social Security Agency (SASSA) cards. SASSA) cards are the main source of income for the destitute Historically Disadvantaged Individuals (HDI) .
By and large, there are other institutions ‘making a killing’ from exploiting the gullibility of the lower end of the market. Perhaps African Bank was unfortunate to have collapsed.