Ithala: signs of improvement for KZN's problem child

2012-04-11 00:00

CONTROVERSIAL Ithala Bank remains a problem child for the KwaZulu-Natal government, but there are signs of improvement under the new board.

The bank appeared before the Finance Portfolio Committee yesterday.

Committee chairperson Belinda Scott expressed concern over the auditor-general’s (A-G) report on the bank.

Scott said the report did not make for happy reading as there was concern over irregular expenditure, losses as a result of write-offs, investigations not carried out timeously and weak internal controls.

She added that these matters would be dealt with by the Standing Committee for Public Accounts (Scopa).

Committee members expressed concern over the high amount in write offs on old loans and that the bank was still failing to receive repayment on its loans. According to the report, material losses amounting to R90,5 million had been incurred as a result of a write-off of irrecoverable loans and advances.

Ithala Board chairperson Dr Mandla Gantsho provided the committee with a performance plan for the year ahead.

He said they had brought down the loan book from 70% non-payment to 48% non-payment and there were plans to bring it down further.

Gantsho added that the plan included having more staff who would act as advisors to clients on how to manage their loans. It would no longer be a case of just handing out money, he said.

Yesterday’s hearing was a much calmer affair compared to previous times, when MPLs would get into a huff over the bank’s maladministration of dodgy loans and extravagant spending. By the end of the hearing Scott congratulated MEC for Economic Development Mike Mabuyakhulu for appointing a “competent” board.

“It makes our work so much easier in this legislature. I am happy to hear from Scopa that they [Ithala] have started addressing matters raised by the auditor-general as well,” Scott said.

Ithala is funded by KZN taxpayers and provides loans to small businesses and entrepreneurs.

Gantsho described the enterprise as providing banking for the unbanked.


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