Jan 6

Written by: PIC Solutions News Editor
Wednesday, January 06, 2010 

THE National Union of Metalworkers of SA (Numsa) yesterday called on the government and Human Settlements Minister Tokyo Sexwale to protect low-income earners from the "brutal" repossession of their houses by banks.

Since the recession, thousands of houses had been repossessed, displacing millions of workers into destitution and homelessness, Numsa said in a statement issued on the eve of the anniversary of the death 15 years ago of democratic SA's first housing minister, Joe Slovo.

Numsa said it was appealing to the government, in light of Slovo's lifelong struggle to improve the lot of the working class, to protect the poor.

Its appeal came in "the midst of massive service delivery backlogs, deepening and racialised income inequalities and spatial underdevelopment", rising living costs and skyrocketing unemployment "among vast sections of the working class and rural poor".

Numsa said concerns about financial institutions more than a decade ago had led to a call in the former Reconstruction and Development Programme (RDP) strategy for "commercial banks to be encouraged, through legislation and incentives, to make credit and other services available in low-income areas; ‘red-lining' and other forms of discrimination by banks must be prohibited.

"Community-controlled financing vehicles must be established with both private sector and government support where necessary. Locally controlled housing associations or co-operatives must be supported, in part to take over properties in possession of banks due to foreclosure.

"Unemployment bond insurance packages and guarantee schemes with a demand-side orientation must be devised. Interest rates must be kept as low as possible," Numsa said, quoting again from the RDP strategy.

Numsa said it and the Congress of South African Trade Unions planned to "accelerate and deepen our campaign of fighting against corruption and crass materialism within the state and private sector which threatens to erode our social fibre and the prospect of a better life for all".

Numsa's call comes when banks have begun to look at what they have to offer new homeowners and low-income earners.

In September last year Standard Bank announced it had increased its risk acceptance rate in its home loan and credit card divisions, which would "benefit first-time entrants into the housing and general credit markets".

Credit risk solutions company PIC Solutions said in a statement recently that it was seeing a similar easing of lending policies among other banks.

Peter Schlebusch, Standard Bank's CEO for personal and business banking, said it was important to support and provide access to finance to the lower end of the economic spectrum. With Sapa

Author: CHANTELLE BENJAMIN ~ Business Day