The Unsecured Credit Machine: FNB Granting Loans Directly From ATMs

Gareth Brickman sends along the following and writes: “I heard about this from someone the other day and thought they were kidding. But apparently FNB really is pouring credit out of every orifice:”

The Temporary Loan is a convenient and easy to take up short term loan, which is repayable within 31 days after you take it up. It is available immediately and there are no forms to complete.

  • There are no application forms to complete
  • You can take it up at any FNB ATM, Online, through Cellphone Banking or any FNB branch
  • The Temporary Loan is available immediately in your Personal Cheque Account or Smart Account
  • The money will be credited to your account instantly if you qualify
  • Should you repay the total loan, or outstanding balance within 31 days, you don’t pay any interest
More details here.

This is the credit machine in full swing. A saturated middle income market for secured debt means the banks are going after low income borrowers who don’t have assets to tie to loans.

The Reserve Bank is keeping interest rates artificially low, and this is completely distorting the loans market. Low income earners are jumping at the opportunity to get access to cash today at artificially low interest rates, and because they actually can’t afford to repay these loans they are being turned into debt slaves. There were many reports that the miners at Lonmin were upset with banks and micro-lenders as they could not repay their debts as a factor that fueled unrest.

Let’s remember the only reason that FNB is going after this market so aggressively, is because they know they have the backing of the government controlled central bank. If a whole bunch of these loans that FNB made to people can’t be repaid and FNB faces insolvency, the central bank will print money to bail them out.

This is why FNB pulled its ad campaign when the ANC responded by calling it “treason.” If the ANC decides they don’t like FNB anymore, they will remove FNB’s privileges granted by the state and Reserve Bank, and then FNB will effectively be kicked out of the banking cartel.

No wonder Michael Jordaan, the CEO of FNB, tweeted yesterday evening:



A big bank cannot afford to be hated and sidelined by the people in control of the state (ANC), which allows the banks to operate as a cartel by eliminating competition and giving the banks a perpetual bailout guarantee.