A bank for the 'unbankable'? Millions of South Africans at the bottom end of the income pyramid have long been regarded as 'unbankable' and previous attempts to set up banks for this sector have failed. But now the Communist Party has come up with a scheme it believes will work. What would Marx, Lenin and Mao have said? A communist bank? Socialists sitting down with capitalists? Unlikely and unthinkable? But that's exactly what's happening on the South African financial scene. The South African Communist Party (SACP) is to venture where commercial financial institutions fear to tread: it is opening its own bank at the lower end of the country's economic sector, although it's not quite as radical as it may sound. The Red Bankers will be setting up shop amidst the wreckage of other financial institutions that ventured into what has long been described as "South Africa's unbankables", the country's poor. Littering the unbankable landscape are the bones of" the once robust Saambou Bank, and the feisty Unibank Both sought to make a buck in South Africa's vast and shifting informal and lower-paid sector; neither survived the high risk required for high return.
The mistake they both made was to apply conventional banking principles in a totally unconventional market. Saambou went out on a high-risk limb and soon found that the trunk had withered.
Unibank looked for quick market share with injudicious,