Parliament's standing committee on finance chairperson Joe Maswanganyi. File
Chairperson of the Standing Committee on Finance, Joe Maswanganyi, on Thursday called for further engagement and a financial sector summit after finding the responses from the Banking Association of South Africa (Basa) and major banks on transformation and lending practices unsatisfactory.
He was speaking a day after the South African Reserve Bank (SARB), its Prudential Authority Institute, the Banking Association South Africa (BASA), Financial Sector Conduct Authority (FSCA), Standard Bank, FNB, Absa, Investec, Nedbank, and Capitec attended the joint sitting of the standing committee on finance and trade, industry and competition portfolio committee to engage the finance sector on issues of transformation, and related matters raised by consumers.
Speaking on SAfm, in an interview with Thulasizwe Simelane, Maswanganyi said while banks presented figures on black ownership and funding to black-owned enterprises, they failed to provide a detailed breakdown of actual ownership structures.
"Basa came to Parliament and told us they are Level 1 B-BBEE compliant, but when we asked for a breakdown of who owns what in the banking sector, they could not provide it," he said. "We cannot simply accept broad statements without evidence."
Maswanganyi said the committee remains deeply concerned about discriminatory lending practices and financial exclusion, particularly affecting black-owned businesses and previously disadvantaged individuals.
He said, “We have a problem of the lending cartel and the financial services. For instance, blacks or previously disadvantaged (people) are given a loan of R527 000 compared to for R2.5 million lent to whites. So access to mortgage finance is a problem. The lending practice is a problem. They prefer to give blacks depreciating asset loans as compared to mortgage loans, that is problematic. So we are going to invite the other sectors, not sub sectors, within the financial sector, the insurance, financial service providers.”
The committee also questioned why banks failed to fully utilise the COVID-19 Loan Guarantee Scheme meant to assist struggling businesses in 2020/21.
"The government made almost R200 billion available, yet banks only disbursed R18.4 billion. Many small businesses collapsed, and roughly 2.2 million jobs were lost as a result. Banks could have done more.
Maswanganyi said the banking sector was worth trillions, which could be invested in productive economic, agriculture, and industrialisation. This as South Africa has a huge problem with poverty, unemployment and inequality.
He said, “The money does not belong to the banks, it belongs to the clients, it belongs to the workers. Why don’t you reinvest the money that belongs to the people?”
Looking ahead, Maswanganyi said the committee will broaden its engagement to include other financial sector stakeholders such as insurers and financial service providers.
"We are going to invite more players in the financial sector, and at the end, we will call for a financial summit to compile a comprehensive report for Parliament," he said. "The banking sector controls trillions in assets—some of that must be productively invested to drive economic growth, industrialization, and job creation."
Parliament is expected to scrutinise further reports from banks and regulatory bodies before making policy recommendations. Maswanganyi warned that if voluntary compliance remains inadequate, legislative interventions may follow.
"The transformation of the financial sector is a constitutional and economic imperative. If banks do not meet their obligations, Parliament will not hesitate to act,“ Maswanganyi said.
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