The Reproduction of Social Disadvantage in South Africa: mapping consumer credit scoring onto the ANC’s policy of ‘social transformation’
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South Africa has the continent’s most sophisticated banking and credit systems with approximately 19 million credit-active consumers. Their credit profiles are based on automated algorithmic assessments that generate data about their creditworthiness. While the precise methods of assessment are corporate secrets, consumer credit scoring is constitutionally prohibited from being designed on grounds of “unfair discrimination”. Against this backdrop, I show in this dissertation that credit scoring, as it is currently constituted in South Africa, offers more to the reproduction of social disadvantage – characterized by interconnected forms of class, gender and race – than to its alleviation. As a tool of the African National Congress (ANC) government’s policy of ‘social transformation’, designed to address inherited forms of social disadvantage, credit scoring is promoted by the state and credit bureaus as non-discriminatory and objective. I test the validity of the main argument by identifying the social categories and social outcomes of credit financing in historical perspective, and comparing these with the contemporary social categories and social outcomes of credit financing, legislation and scoring. This task is divided into four parts. Firstly, to assess social disadvantage as a reproduction, I develop a theoretical framework that allows for the expansion of ‘apartheid-as-time-period’ to ‘apartheid-as-social-condition’. Secondly, I examine the ways in which social categories of disadvantage in credit legislation, policy and scoring under the ANC government (1994-present) share similarities with the social categories that shaped access to credit under the National Party government (1948-1991). Thirdly, I repeat this examination but from the perspective of the social consequences that stem from social categories. Fourthly, by drawing on open-ended interviews with corporate professionals, students loan holders and mortgage holders, I provide three case studies to examine the extent of similarity between social categories and social consequences in historical and contemporary perspectives: Durbanite consumers’ social experiences with credit scoring, racialized access to higher education, and credit-scored mortgages in Durban. By demonstrating that credit scoring, in particular, is biased and subjective, and that it decontextualizes social circumstance, I conclude not only that there is a disconnect between credit scoring and the overarching policy of social transformation, but that the social condition of apartheid characterizes reproductions of social disadvantage.