Issued by: North West Communication Service
1 DECEMBER 1995
Speech by the Honourable Premier at the opening of the Provincial Headquarters of Amalgamated Banks of S.A. ON FRIDAY, DECEMBER 1, 1995
I read the supplement ABSA placed in yesterday's local news- paper. I must confess I was flabbergasted because in my view, what ABSA promises to do in terms of the Reconstruction and Development Programme is a revolution.
The opening of the Provincial Headquarters of ABSA is symbolic of the partnership that should exist between the government and banking institutions in the fundamental task of the reconstruction and economic development of the province.
The government of the North West welcomes ABSA to a province which poses challenges, but which also has great opportunities. Not unlike in developed countries, South Africa's commercial banks have in the past been reluctant to provide comprehensive services for the fragmented, risk prone and geographically dispersed third-world component of our country.
This reluctance was in particular to black emergent enterprises in respect of which economic factors militated against the gradual development of bank-client relations in both the urban and rural areas.
It was only logical, therefore, that commercial banks have for long been reluctant to risk their clients funds through the granting of loans to and investment in black owned or controlled enterprises.
The presence of ABSA in the capital city is a welcome sign that commercial banks are giving increasing attention to the needs of township and rural folk, and we are hopeful and confident that there is going to be innovative financing schemes to assist particular types of clients.
We are hopeful that our partners in the RDP will analyse the character of this new client-base and design dynamic product packages which will stimulate this sleeping giant called the black market. I am almost confident that the decision by ABSA to establish a presence in this province was as a result of the realisation that the market in this province has great economic potential.
A significant part of this market is made up of an emergent small business sector which has proved to have a formidable labour-absorptive capacity. Although the statistical base of this sector is poor we have little doubt it plays a crucial role in people's efforts to meet basic needs in this transitional period of fundamental structural changes, where the formal economy is unable to absorb the increasing labour supply.
I am sure you will be interested to know that people have over the years engaged in innovative co-operative schemes such as megodisano, stokvels and funeral co-operatives. These co-operatives have played a significant role in filling part of the vacuum in commercial funding.
These co-operatives are alive and well and with managerial skill assistance and after care could be the vehicle of black economic empowerment by way of acquiring business assets and social-develop- ment contracts of the RDP.
We are gratified that ABSA has not been daunted by the rural nature of this new clientele. With co-operation between the government, banking institutions and the people themselves, the infrastructural transformation of the rural areas within the framework of the RDP is going to be a rewarding exercise.
There might be areas where the government might be called upon to given more specific catalytic support by way of subsidisation and other support, but in general the area is receptive to investment, people are paying their loans, services and rentals.
Your investment is going to yield lucrative dividends, for both the ABSA and the communities in which you invest. As the people are economically empowered, so will your investment grow.
We in the Province are happy to be associated with an institu- tion like ABSA. Together we can face the future with the confidence that we can overcome the challenges that are facing the people of this Province.
I THANK YOU ALL !!!