VBS Mutual Bank customers wait outside the bank in Thohoyandou, Limpopo to demand their money back in this October 17 2018 fie photo. Picture: SOWETAN/ANTONIO MUCHAVE
VBS Mutual Bank customers wait outside the bank in Thohoyandou, Limpopo to demand their money back in this October 17 2018 fie photo. Picture: SOWETAN/ANTONIO MUCHAVE

The mooted plan by the Black Business Council to establish a black commercial bank should be given a nod as there is a need for an alternative bank to cater for the working class people. Considering the calibre of the proponents behind the plan, the bank is predestined to transform lives of black people and material conditions on the ground.

For reasons of timing, it will have a material effect on black people and liberate them from the present-day discriminatory practices driven by greed for profits.  The majority of people would support the bank to grow rapidly and give the major banks an intelligent competitor.

The bank can benefit from the missing-middle hurdle, which has been the key restraining factor in the development of our communities, to make substantial gains on credit extension to black entrepreneurs. The bank would certainly register positive performance in terms of a sustainable profit margin due to growing client volumes and revolutionise the banking environment in keeping with the radical economic transformation agenda.

And it would become competitive over time to branch out of the country into the region. The success of the bank would resonate with the pride of the people, following the controversial collapse of the VBS Mutual Bank.

Most businesses tend to oscillate between an extreme of gloom and the wildest optimism by co-opting politicians in their affairs to gain political clout than joining forces with bona fide entrepreneurs.

In short, politicians should stay in politics and allow entrepreneurs to roll up their sleeves to develop a client-focused, Afrocentric business model that provides lower-cost banking and better value to previously disadvantaged individuals.

Hopefully, the government would lend a hand for the bank to get going to stimulate a culture of entrepreneurship and address the challenges of inequality in society.

Morgan Phaahla
Ekurhuleni