Godfrey Sigwela
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New loan banking system could yield dozens of jobs instead of confrontation

Port Elizabeth, South Africa Current Affairs June 8 @ 11:54am


THERE is an urgent need to rush and cover the gap opened by the shrinking economy in South Africa. The debate about the relationship between the South African Reserve Bank and job creation, could be another way to close it.

This time the government of the day and the ruling party the ANC, should open the doors for the architects of ideas to suggest.

One ticking idea, what about letting the South African Reserve Bank as it is. Instead a new policy should be introduced to determine the banks way of lending money.

For instance, if a borrower/entrepreneur borrows from the bank or gets a loan, the bank should keep the portion of the money borrowed. Then the bank invest that portion on behalf ot the borrower. Then the invested portion would be released with interest once the loan is settled.

That way the bank will have enough money in circulation as it will borrow less from the South African Reserve Bank. The repo rate would be less as well as the interest rates would remain less.

There would be a less chance of people ending up in credit bureau. As a result many jobs would be created with a less chance of sinking in debts.

The need for a new alternative form of lending is being justified by the number or people being the victims of the pyramid schemes. That followed after being promised to invest large sums of money. In return the money would be doubled after yielding a huge profit.

Recently the Serious Commercial Crime Investigation unit of the Hawks in South Africa arrested a man who identified himself as 48-year-old Lucky Mudau. He allegedly operated a pyramid scheme and robbed people in King William's Town in the Eastern Cape.

Hawks spokeswoman Captain Anelisa Feni said: "The man was arrested on the 14th of May 2019 by the Serious Commercial Crime Investigation unit of the Hawks for allegedly running a pyramid scheme known as Feel Good Holdings.

"It is alleged that he was operating the business in King Williams Town where he was arrested."

She said: "Approximately about 30 (thirty) people joined the pyramid scheme. Participants invested amounts ranging from R200 (two hundred rands) to R10 000 (ten thousand rands) in exchange for 100% (hundred percent) profit.

"Hawks Investigations reveal that the real Lucky Mudau resides in Limpopo. The accused's  true identity has not yet been established. 

"The Hawks is appealing to any person who invested money in Feel Good Holdings to open a case at the King Williams Town police station. 

"It is alleged that last year the suspect operated the same pyramid scheme in Limpopo. He fled the province during the same year after police started investigating his alleged criminal activities."
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