By Pinky Khoabane
I spent last week thursday at Block FF in Soshanguve. I was there to interview a group of residents representing the 1230 (One thousand two-hundred-and-thirty) residents who took out bonds with Saambou on the dawn of democracy. By 2002, this bank had gone belly-up and its mortgage book was bought by First National Book (FNB).
Saambou is accused of transgressing the rules of the Usury Act by having denied its low cost housing clients benefits of interest rate cuts and even charging them beyond the maximum rate permissible by law. When FNB took over, the complainants claim it continued with the discriminatory practices.
Thomas Maluleke is one of them. He stood outside the fence of the house from which he was evicted in 2005. He, like many of the residents who had taken-out bonds with Saambou claim that they were charged more in interest rates in violation of the law. The amounts run into tens of thousands of rands in overcharges. He had been working for Telkom as an assistant technician for 18 years when he was retrenched in the year 2000. Within three months of his retrenchment, an agent came to his door and told him he had to vacate the house because he (the agent) had bought it on auction. Maluleke refused and it was to be a battle of five years before he lost in a court of law in 2005. He now lives on an informal settlement nearby.
With democracy in the horizon so too came an era of hope. Blacks who had for centuries been denied proper housing through the legacy of apartheid – which didn’t build many houses for Blacks – suddenly had optimism. Statistics show that for every one brick house, there were 43 Blacks in comparison to one house to every 3.5 whites.
The backlog in the urban areas was estimated at 1.3 million in 1994.
Apartheid’s legacy of discrimination permeated every aspect of life and the financial system was not immune. Access to finance for Blacks was a major problem but even more so for low cost housing. The 1994 White Paper estimated that 70% Blacks didn’t qualify for finance but even those who did were denied finance on the basis of their skin.
Many of the residents of Block FF had had a long service history as civil servants, teachers and policemen and yet the banks had always viewed them as high risk. With the advent of democracy, some of the banks relaxed their terms albeit that it has now emerged this decision may have been for ulterior motives.
Saambou in particular targeted this community which comprised of people with a steady and sustainable income. For a bond of around R40 000, they could get a two-bedroomed house, a kitchen, dining room and an empty room which they could turn into a bathroom/toilet.
UnCensored has written extensively on this case. Read here http://uncensoredopinion.co.za/blacks-robbed-fnb-running-patience/
Equality Court Case
The Equality Court case against FNB was to sit at the beginning of this month but was postponed. The group at Soshanguve was angry at what they viewed as yet another delaying tactic by FNB. In 75% of the 1230 cases, the clients were charged over the maximum interest rate permitted by law. Most of them said they were charged 16% at the time when the maximum rate fluctuated around 14%. Many claimants have also died while waiting for the law to to take its course.