ABSTRACT
This chapter highlights a number of the most important aspects of the reconfiguration and why microcredit has been one of the most destructive interventions in post-apartheid South Africa. The ultimate result in South Africa of the wave of control fraud that took place in the microcredit sector from the late 2000s onwards was a US-style subprime-like crisis of greed, fraud, inequality and exploitation. Perhaps best summing up the new reality is Patrick Bond (2015: 239), who describes the situation as one where microcredit has evolved into predatory credit, and so, as in the USA with its sub-prime mortgage calamity, it is inevitably 'underdeveloping the borrower’. Microcredit advocates began to argue that major progress would soon be visible in terms of addressing poverty and unemployment in the black community. Leaving aside the weak-to-negative short-run outcomes of microcredit, an argument has often been that the microcredit model will give rise to a longer-run sustainable development trajectory in South Africa.
