Campaign for the Transformation of the Financial Sector and the Building of Co-operatives

06 September

This is to invite you to a Briefing and Consultative Meeting on the issues mentioned above. The details of the meeting are given below.

DATE : Wednesday, 13 September 2000
TIME : 13H30 - 17H00
VENUE : COSATU Boardroom, 2nd floor, COSATU House 1 Leyds Street, cnr Biccard Street, Braamfontein

PROPOSED AGENDA
13H30 - 13H45 Welcome and Introduction
13H45 - 14H15 Background Political Input
14H15 - 14H45 Full Briefing
14H45 - 15H30 Discussion
15H30 - 16H00 Campaign Plan
16H00 - 17H00 The Way Forward and Closure

In essence, the meeting will discuss "Why should we campaign for the transformation of the financial sector?". The meeting will also receive the aims and objectives of the proposed campaign and a draft mobilisation plan for the campaign. These issues are s ummarised in the attached documents. We request your organisation to discuss these documents and develop positions on the issues raised therein as part of preparations for the Briefing and Consultative meeting.

We look forward to your speedy and positive reply. Please confirm your attendance with Thelma Mani at our head office by 08 September 2000.

For socio-economic justice!

BLADE NZIMANDE
GENERAL SECRETARY
SOUTH AFRICAN COMMUNIST PARTY

CAMPAIGN FOR THE TRANSFORMATION OF THE FINANCIAL SECTOR

Red Saturday against Redlining! Mass marches - 10h00, 21 October 2000

In summary, this is some of the context informing the operation of the financial sector in South Africa.

• Even though the poor take their money to the private commercial banks, these banks primarily deny credit to poor and working people through stringent requirements for opening bank accounts and accessing loans for basic needs. Banks continue to fund luxury expenditure by the rich.
• Commercial banks also do not provide sufficient resources to SMMEs and the informal sector. If these received sufficient funding at affordable interest rates, there would be a difference in terms of job creation and development initiatives by our people.
• Once poor and working people are in the commercial banking system, they get punished even more through high bank charges and interest rates. These contribute to the reduction of the cash power our people have.
• Many townships, rural areas and inner city areas where basically poor black people live are redlined for housing and commercial loans by banks. This redlining contributes to lack of access to housing, urban decay and lack of financing for commercial acti vity in these areas.
• The banks conduct their activities and punish poor and working people without following the principles of procedural and administrative justice.
• This situation contributes to the exploitation of our people by micro-lending loan sharks. The extent of the problems caused by these loan sharks has received good media attention in the last two years.
• Related to the commercial banks is also the institution of the faceless Credit Bureau which blacklists retrenched workers and the poor and is actually undermining our attempts to provide access to finance for a number of community development activities.
• The commercial banks are privately owned and controlled by big players in the economy largely motivated by profit maximisation.
• There is no significant alternative and publicly owned and controlled people's banks.

The above summary actually confirms the need for massive economic inequalities mainly affecting the black working class. The big challenge therefore is to mobilise our people behind socio-economic transformation that will benefit the working people and the poor. Given the power and pressure of international and local private capital we need a counter-balance, precisely in order to strengthen democratic and people-centred socio-economic transformation. The challenge of massive socio-economic transformation will not be resolved in the boardrooms but through the strategic deployment of the mass power of poor and working people.

WHAT ARE THE PROPOSED AIMS AND OBJECTIVES OF THIS CAMPAIGN?

This is fundamentally a comprehensive and long-term campaign. In brief, its aims and objectives are as follows:

• To struggle for community re-investment legislation and the transformation of the financial sector in favour of the poor and working people
• Banks, through legislation, need to be forced to set aside certain amounts of money in low-cost housing, SMMEs, the informal sector and other developmental initiatives beneficial to the working people and the poor
• To build co-operatives through an appropriate legal and financial environment
• To fight for the creation of a co-operative banking sector and other publicly owned financial institutions
• Creation of a co-operative banking sector, in which the savings of the working class are decided by the working class itself and be used to address the developmental needs of our people. For example, in a country like Cyprus, co-operative banks, which are legislated in law, provide for housing, infrastructure and loans to ordinary people at rates below the lending rates of commercial banks. There is no reason why we should not be saying the time has come now for the workers' to reclaim their stokvel moneys , insurance investments and their provident funds to be used for the benefit of the people themselves
• The convening of an urgent sectoral summit on development financing and banks. We need to ensure that this issue is placed very high on the agenda of NEDLAC.
• This campaign also needs to deal with the issue of prescribed assets.
• The campaign should also contribute to the evolution of a strategic approach around the restructuring of public development finance institutions like the Development Bank of Southern Africa in order to re-orient these towards infra-structural development initiatives aimed at realising overall development goals.

WHAT IS THE PROPOSED PROGRAMME OF THIS CAMPAIGN?

In summary, these are the proposed phases and activities of the campaign:

• Briefing and Consultative Meetings (nationally and provincially)
• Red Saturday Against Red-Lining
• provincial marches and a national march on 21 October 2000 submitting demands to the Council of South African Banks and government representatives
• Mobilisation for the day of action
• Follow up action to the demands submitted
• Programmes to popularise, mobilise for, and building of co-operatives
• Relevant legislation in relation to the transformation of banks, community re-investment by banks, building co-operatives and a co-operative bank sector