Charging 33%interest bank deserves closure

AFRICAN BANK demise – I do not usually take delight in other people’s or businesses’ misfortune, however, the collapse of the African Bank’s share price and loss of R6.4-billion fills me with glee.

Banks, money lenders and loan sharks have been around for centuries and perform a vital service to people and the economy.

People borrow money for many reasons, some sensibly, some carelessly and some just downright recklessly. I am not sure which category my fiance fits into (well I do really), but I certainly know which category African Bank fits into.

I will explain. I could never understand why my fiance was always broke, but was at the same time extremely extravagant, until about a month ago when she was now incapable of paying her commitments, which obviously placed huge strain on her, as well as our relationship.

Upon insisting from her on full disclosure of her financial affairs, it came to light that this bank has loaned her in excess of R250 000 over the last year at an interest rate of 33% for the next 72 months (six years). Her repayments on a monthly basis are about R9 400. A total repayment of about R680 000.

All of this on an unsecured loan, ie: no assets such as a car or house to secure this loan.

Some might say, no big deal, but this loan has been granted on a net salary of less than R14 500 per month.

My fiance is not, and I emphasise not blameless, however, if this is not reckless lending, I and my attorneys do not know what is.

African Bank can shout, scream and sue. We are in the process of taking them to court and they will not see a cent.

I wonder how many more of these reckless loans are out there.

Well, obviously at least R6.4-billion worth.

Reckless lenders beware. It will come back to bite you.

I am quite sure the next one will be that other new entrant on the SA market. May you all rot and face criminal charges.

I SPY, GREENBUSHES