Brief background

"Red October campaign" calling for:

• transformation of the financial sector

• building of cooperatives

Objectives:

• influence the community re-investment legislation and the transformation of the financial sector- in favour of the poor
• creation of a cooperative banking sector and other publicly owned financial institutions
• convening of an urgent sectoral summit on development financing and banks
• directing investments to labour intensive and socially desirable assets/projects.

(nedlac convened the summit in august 2002)

Background

NEDLAC Act (Act NO 35 of 1994)

Three objectives:

• sustainable economic growth
• greater social equity
• increased participation in economic decision making at all levels

Specific responsibilities

• conclude agreements on and consider all significant changes to social and economic policy
• consider all proposed labour legislation
• encourage coordinated policy-making
• dispute prevention- S77 of the LRA

Key deliverables

Key focus points

• improving the efficiency of the delivery of financial sector services
• provide sustainable and affordable banking services
• support higher level of saving and investment
• developmental investment that will create jobs, raise standard of living and strengthen the economy
• encourage broader and representative ownership, control and employment within the financial sector and the

Economy as a whole

{against the backdrop of a financial sector that is diverse in nature, size and ownership)

What was agreed?

• ensuring access to basic financial services
• increase participation in the economy, encourage savings and improving the quality of life
• development of sustainable institutions to serve poor communities
• support cooperative banks and NGO, as they can both Increase ownership and increase diversity in the sector
• new legislation for second and third tier deposit taking Institutions
• proposals to enhance the development impact of the Regulatory framework
• concrete support programmes for financial cooperatives and micro –credit providers
• proposals for appropriate regulation for micro-lender

What was agreed?

Regulation of credit bureaux

• regulatory framework to ensure that they provide unbiased information, open to consumer complaints and there is no scope for discrimination

Discrimination

• Financial sector should strengthen or establish a code to end unfair discrimination
• legislate uniform norms on disclosure of financial services by race, gender, location, categories of Amount.

HIV AIDS

> ensure that HIV+ people have improved access to housing financing and other services

Capital market and investment

• Increase overall investment that will strengthen infrastructure, create jobs, meet basic needs and stimulate economic activity
• establishment of setting realistic targets and monitoring mechanisms
• develop training for fund managers and retirement-fund trustees

Development finance institutions (DFIs) and other state-owned financial institutions

• postbank should maintain and expand its services to poor communities
• other DFIs should support appropriate investments

Savings initiatives

• promote savings culture and improve saving facilities to be available to the majority of our people

Priority areas

• improvement in the level of saving and overall investment
• improved access to finance
• regulation of credit bureaux
• issues around redlining of HIV/AIDS people and discrimination
• financial sector charter to address all these

Activity

• >task team within the chamber to implement the agreements is in place
• Contractual savings - pensions and provident funds
• GDS (addressing the investment challenge)
• improving overall investment

• >support for co-operatives
• regulation of credit bureaux
• retirement fund reform
• financial sector charter

( a meeting with the minister of finance is scheduled for Monday 20/09/04 to tie the outstanding matters on the charter front)

Activity

• support for co-operatives

• government sponsored study tour
• conference on cooperatives is in November 2004
• legislative framework

• regulation of credit bureaux
• retirement fund reform
• financial sector charter

( a meeting with the minister of finance is scheduled for Monday 20/09/04 to tie the outstanding matters on the charter front)