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Banks tough on foreign workers

By unknown | Aug 02, 2007 | COMMENTS [ 0 ]

Maryanne Maina and Xolile Bhengu

Maryanne Maina and Xolile Bhengu

Three-year work permits make it expensive for foreign workers to buy cars and nearly impossible to get home loans.

For instance, Njeri Rwambo applied for a deal to buy a Renault Clio for R2400 a month over five years. But since the repayment period was longer than her work permit, the bank told her it was only willing to finance the car if she paid R3300 a month over three years. Delays in processing her application due to the National Credit Act resulted in her repaying the car at R4027 a month over 28 months.

Rwambo's colleagues pay 13percent interest thanks to a deal bet-ween her employer and the bank. But she has to pay 15percent.

"The bank refused to reduce my rate stating that I was considered a high risk and that they would not be able to track me down in case I changed employers. I asked them if they would extend my payments to five years if I got a five-year permit. They declined again saying that they would not be able to change the payments till my permit expires," she said.

Dr Will Edridge, a British national residing in South Africa said: "I have not experienced the same issue as I managed to buy my car easily, but I have heard of several cases in which foreigners are unable to access financing easily to purchase vehicles or property here."

To buy a house, foreign workers have to pay upfront unless they already own the equivalent amount of assets in this country.

Banking Services Ombudsman Clive Pillay commented that this is a requirement of this country's exchange control regulations.


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