Litigation: Capitec reckless lending decision confirmed

While it previously staved off allegations of reckless lending, Capitec Bank has been found guilty of the practice. A Cape Times report says the Mpumalanga High Court (Middelburg) has ruled that the bank lent nearly R100 000 to an employed but over-indebted man without due diligence. Thulani Mahlangu was lent the money on grounds that he had a household additional income of R5 000. A debt counsellor discovered during a debt review that Capitec lent the loan despite not having proof of this additional income. The debt counsellor took the matter to the KwaMhlanga Magistrate’s Court, which ruled that Capitec lent recklessly. Capitec then took the matter to the High Court to attempt to appeal the magistrate’s ruling. It argued before Judge Vincent Ratshibvumo that the magistrate erred in finding that it was obliged to do household income assessment in calculating Mahlangu’s affordability as he qualified for a loan on his own individual assessment. Ratshibvumo noted it was not disputed that Mahlangu stated that he had an additional household income. ‘The dispute was on whether the appellant (Capitec) had an obligation to assess and investigate this disclosure,’ he said. ‘What had a bearing was the appellant’s failure to properly assess it, to demand documentary proof thereof.’