Today, on the anniversary of the launching of the United
Democratic Front, the parties agree on the following proposals.
These agreements must be seen as a package.
3.1. Ensuring access to basic financial
services: To engage effectively in the economy, encourage
savings and improve the quality of life, every South African
resident should have access to affordable and convenient payments
and savings facilities. Both the public and private sector
financial institutions must play a role in achieving these
aims.
3.2. The parties will jointly research the economics of basic
financial services and on that basis establish mechanisms and
timeframes for achieving universal access.
3.3. Development of sustainable institutions to serve
poor communities. While the large formal financial
institutions have an important role to play in providing services
for the poor. They must interact with and support smaller
institutions, especially co-operative banks and NGOs that can
provide micro-credit to the poorest households. We need to harness
the energies of the existing institutions in our communities, such
as stokvels and burial societies, in order to mobilise our people's
savings. The smaller financial institutions serve to increase the
diversity of the sector and broaden ownership.
3.4. The parties agree on the need for new enabling legislation
for so-called second and third tier deposit-taking financial
institutions. As a start, they have agreed key principles for
legislation for financial co-operatives. The legislation should
ensure that these institutions operate according to co-operative
principles and enjoy adequate prudential oversight.
3.5. Following the Summit, the parties will also make proposals
on ways to enhance the developmental impact of the regulatory
framework.
3.6. The parties also agree that all the constituencies should
seek to support financial co-operatives and micro-credit providers.
After the Summit, they will engage on a concrete support
programme.
3.7. In the absence of realistic alternatives, many wage-earners
have had to resort to micro-lenders when they need credit. In too
many instances, the result has been an accumulation of excessive
debt at a high price. Following the Summit, the parties will
propose appropriate regulation for micro-lenders to minimise the
negative effects of usurious practices.
3.8. Regulation of credit bureaux. Credit bureaux should play a
positive role by providing creditors with necessary information on
potential borrowers, which will reduce information asymmetries in
the market. The parties have proposed elements of a regulatory
framework to ensure that they supply only reliable information that
is relevant to a person's creditworthiness; that they are more open
to consumer complaints; and that there is no scope for unfair
discrimination in their operations.
3.9. Discrimination. The parties have agreed
that, within the context of the Equality Act of 2000, every
subsector within the financial sector should establish or
strengthen a code to end unfair discrimination. Government should
legislate uniform norms on disclosure of financial services by
race, gender, location and categories of amount. People who face
unfair discrimination should have an effective route for
adjudication.
3.10. HIV/AIDS. The parties are particularly
concerned about the need to end unfair discrimination against
people with HIV and develop appropriate services for them.
Following the Summit, they will work together to achieve this end,
and especially to ensure that people with HIV have improved access
to housing finance and other services.
3.11. Capital markets and investment. The
parties agree on the need to increase overall investment and in
particular projects that strengthen infrastructure, create jobs,
meet basic needs, stimulate economic activity in the poorest
regions and communities of South Africa and/or support development
throughout southern Africa. They agree on the need to establish a
system to identify these projects. On that basis, they will engage
around the establishment of realistic targets and monitoring
mechanisms. In addition, they will develop training for fund
managers and retirement-fund trustees to enable them to adopt more
informed and appropriate investment strategies.
3.12. Development finance institutions (DFIs) and other
state-owned financial institutions. Following the Summit,
the parties will make proposals around the developmental impact of
these institutions and, if necessary, recommend improvements. A
particular concern is to ensure that the PostBank should maintain
and expand its services to poor communities.
3.13. Savings initiatives. The parties have
agreed on activities to promote a savings culture, mobilise our
people around the need to increase savings and improve the savings
facilities available to all our people.