Simelane says it’s hard to get a loan as black person

Justice & constitutional development minister Thembi Simelane says she had no choice but to take a loan from Gundo Wealth Solutions, which is implicated in the VBS Mutual Bank “heist” scandal, to start a business in 2016 that would benefit her family. 

She was mayor of Polokwane and its accounting officer when she took the loan from Gundo, which brokered investment deals on behalf of VBS and the municipality.

The municipality invested R349m in VBS.

Simelane said she could not get a loan because of SA banks’ high interest rates, and also that it was difficult to obtain a loan as a black person. So she said she had no choice but to take a loan from Gundo.

“It is difficult for a person who looks like me to get a loan in the South African economy. It’s difficult to get a loan and start a business as an African child without any form of assistance. There are so many brilliant dreams and ideas that black young people have but there’s no financing for them,” she said in an interview with eNCA on Sunday. 

She conceded she should have done more research before obtaining a loan from a financial adviser. The Sunday Times reported Gundo was not a registered financial services provider. 

“I’m not sure if I would have done things differently. I should have looked into them and their registration but they were registered with the Financial Services Board, which I thought was sufficient to prove they are in the finance business. Like any other [due] diligence in getting a loan, I should’ve thought better than I did.” 

Simelane received a nearly R600,000 loan from Gundo to buy a coffee shop in October 2016. She said she repaid the loan in full. She admitted to taking the loan, but claims she was unaware of Gundo’s involvement with VBS, which collapsed after it was looted of more than R2bn. In July, the Treasury blamed “corruption, money-laundering, manipulation and theft of citizens’ hard-earned money” for the collapse.

“I don’t know who they were involved with. The only way to get to know where Gundo has invested will be through a section 52 report, which comes every three months to update the council about the status of its investments, if there are any. That’s how I could’ve known about their investments. In terms of the names of the people, I don’t know and I’ve never met them,” Simelane said.

“I didn’t know where the money was coming from. He was not dealing with the Polokwane municipality only. That’s why I said I never took a loan from VBS when I was initially asked. That was the first time I found out where the money I got was coming from, so I wasn’t aware. They could’ve given me money that comes from their own businesses,” she said.