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Report: Capitec Bank faces lawsuit over allegations of reckless lending

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Report: Capitec Bank faces lawsuit over allegations of reckless lending

isfacing a lawsuit accusing it of offering short-term unsecured loans in a mannerthat amounted to reckless lending.

Financialadvisory firm Summit Financial Partners filed the lawsuit late on May 3,alleging that Capitec Bank's loan practices violated South African law, as thebank would charge customers every time they took out one-month loans. FriedlKreuser, communications manager at Summit Financial, also said Capitec Bankfailed to conduct affordability assessments on clients who successively tookout such short-term loans, Reuters reported May 4.

Thebank reportedly denied the allegations, adding that the loan product was alreadydiscontinued and replaced with a new one that has a six-month approval system.

SummitFinancial has filed lawsuits against other firms as well over matters of loansand credit, Reuters noted.