By Ashleigh Brown, journalist, Justmoney
“African Bank and its employees care for its customers and the bank with its 5 500 employees, 511 branches and 1,000 seater call centre remains open for business,” said Tom Winterboer, curator of African Bank limited (Abil) in a statement.
After Abil was put under curatorship, Winterboer was given the task of collecting debts, safeguarding deposits and building a sustainable banking operation that goes beyond unsecured lending. In addition to this, Abil is reportedly exploring secured lending through a vehicle finance division.
Winterboer has been quoted as saying that he has made progress over the past month with the bank. Furthermore, he is preparing to apply for a banking licence within weeks. "We are looking at listing in the second half of February, which means applications to the Johannesburg Stock Exchange must be in by early November. We will submit a banking application in the next few weeks,” said Winterboer.
However, Abil said in a statement that the listing was also on condition of other factors, such as a banking licence and various approvals. “We are targeting a timelime of listing the good bank around Feb 2015, noting that this is subject to a number of regulatory approvals and processes including a banking licence application, the outcome of which may well affect the ultimate timing.”
Vehicle finance
According to Abil’s website it now offers vehicle finance, a ‘tailor made credit solution to finance a new or used vehicle’. Finance is available for purchases up to R240 000 at selected dealers nationwide. The bank adds that it offers ‘comfortable’ repayment plans of up to 84 months (seven years) and fixed monthly instalments. What's more is that there is no deposit required.
However, Winterboer, said that he was exploring secured lending options for vehicle finance. "We are already doing vehicle asset finance and could do that on a secured basis. We are looking at places such as Brazil and India (for lessons),” he told BDLive.
(At the time of publication, Abil had not responded to questions posed to them concerning interest rates of the secured loans on vehicle finance).
Pay points
In an effort to encourage customers to pay their monthly instalments, and not to default on their loans, Abil has put in place new mechanisms for customers to pay. "We are putting out point-of-sale machines to collect at branches,” said Winterboer. This would essentially allow customers to pay by swiping their cards at an Abil branch.
Furthermore, Abil customers are also able to pay their instalments and debt repayments at Shoprite stores: “Shoprite Checkers has been accepting account payments at its Money Market counters on behalf of African Bank for several years now. This service to customers give them the ability to pay their monthly instalments due to the bank at any Shoprite or Checkers supermarket in the same manner as they are able to pay their utility accounts, buy electricity and airtime, pay TV licenses and pay fines for traffic offences,” said Shoprite in a statement.
Over the past month, Abil had collected over R2billion in repayments.
Investigations
Earlier this month, the South African Reserve Bank (SARB) said that it would investigate the circumstances which gave rise to the collapse of the bank.
“SARB recognises the importance of investigating the circumstances that gave rise to African Bank being placed under Curatorship on 10th August, 2014. It has therefore decided to institute a formal independent investigation in terms of section 69 (A) of the Banks Act No. 94 of 1990.
"The Registrar of Banks has, pursuant to this decision, appointed Adv. JF Myburgh as Commissioner in terms of the said provisions with effect from 30th August 2014. He will be assisted by Vincent Maleka, SC, and Brian Abrahams. Notice to this effect will appear in the Government Gazette of 12 September 2014,” said SARB in a statement.
Customers were warned to that, despite all of African Bank’s woes, they still need to pay their debts and not to fall behind on monthly repayments: “Customers are being encouraged to continue to pay their loans in order to manage their credit profiles,” said Winterboer in a statement.
“African Bank debtors must not see the company’s financial stresses as an opportunity to take a payment break. Consumers must still adhere to their debt obligations and must not think that they are no longer liable for their debt repayments. Any defaults would still be listed on the bureaus and negatively affect your credit record,” said Ian Wason, CEO of DebtBusters.
Chronicling African Bank’s problems
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