Page 148 - A People Called Afrika

A PEOPLE CALLED AFRIKA

the West, where we reduce borrowing and also reduce the
role of banks to the supply-demand side, opening up room
for peer-to-peer lending, which would allow individual lenders
to make some revenue on small tickets. Banks would come
in as the place to keep the money and facilitate the transfers.

In line with this, the banking official asks a crucial question
about Afrika’s banking system and the way that it current-
ly operates, “Why is it that banks cannot lend without se-
curity?” He explains that there are alternative systems that
work where individuals loan each other money, such as in
the Somali and the Hindu communities, which are sim-
ply based on a code of honor and not on the basis of col-
lateral. He says that these systems work because the lend-
er and the borrower both know that God is between them.

The Hindu community involves their priests in such trans-
actions, and those involved, not wanting any dispute to go
before the temple or the priest, simply honor their commit-
ments to pay what is owed. He affirms that Afrikans in tra-
ditional economies/societies also had ways of resolving dis-
putes and disruptive behavior. All of these examples stand
in stark contrast to the requirements of this modern system,
which has a lot of paperwork with loopholes that customers
look through the legal clauses prior to signing to find so as
to escape binding agreements and in so doing not pay back
what is owed. He believes that governments would be will-
ing to go the direction of modifying banking the way that it
has been done and respecting the honor code of peer-to-peer
lending, if it causes more transactions to take place because
the benefits would be distributed throughout the economy.

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