Douglas Schorr

From promoting community wealth to enriching the few, trapping the majority

You walk into your local bank. Touch screens greet you, forms pop up, your financial future is decided by algorithms in distant data centres. The most personal interaction is the security guard’s nod.

It wasn’t always this way.

The banker knew every customer by name—their businesses, families, and dreams. When someone needed capital to expand a farm or start a business, he wasn’t just checking credit scores—he was investing in the community’s future, growing his customer base as surely as the farmer raised his children.

Today, banking is President Ramaphosa’s Black Economic Empowerment (BEE) goldmine. It’s so procedural: complete Step A, move to Step B—any simple language will do. The paint-by-numbers approach pauses only at CEO level, where complex jargon justifies astronomical salaries.

Honey, I Started a Bank

A curious villager paused to watch a beekeeper harvesting honey from a hive in a tree. “Why are you leaving some behind?” he asked.

The beekeeper replied, “I’m borrowing from these bees. I sell the portion I take, supporting my family. To some customers, I’m their raw material supplier—they too support their families on the honey and comb. I leave enough so the hive can rebuild. These stings? That’s my cost of doing business.”

That observation—that sustainable lending benefits both parties—sparked one of humanity’s greatest innovations. By 3000 BCE, temple-based grain lending with interest was flourishing in Mesopotamia. Hammurabi’s Code later capped interest rates: 20% on silver loans, 33% on grain.

These early bankers weren’t just shuffling papers. They risked their assets and reputations on human potential. They judged borrowers not just by character but by how their projects served the wider community. But they made judgemental mistakes: soon, borrowers needed guarantors—respected community members who shared the risk. This wasn’t just about security; it created accountability. When you borrowed, you carried your guarantors’ reputation, too. Defaults plummeted.

Banking in the Bush

Fast forward to 1960s Rhodesia (now Zimbabwe). The country had 55 community banks—one per district—integrated within the district commissioner’s office. These weren’t profit-driven but catalysts for development.

Community Advisors helped villages design projects—a classroom, a dam, or a bridge. Technical staff refined the plans. The district’s lending office moved things forward—but with a crucial condition: community ownership. Communities contributed half the funding if a local contractor was selected to do a complete job. For contributory works the community was expected to provide labour and local materials while government arrived with expertise, heavy equipment and supervision. These projects weren’t charged interest. The economy’s return came through the numerous by-products and reduced dependency. And the amazing effect one village’s advance has on its neighbours.  

This wasn’t charity. It was investment in human potential—what economists call “positive externalities” and villagers called “a better life.”

The Vanishing Middle

Today, those relationship-based banks have largely vanished. Even Germany is surrendering the network that once spurred its economic rise. Ireland no longer has independent lenders. China now revolves around state-capitalist banks. With each legislature-induced catastrophe, 100s of America’s tiny banks imploded. A few financial giants now offer everything—ATMs to funeral plans—“your life in one stop,” say nearly identical brochures.

In 1968, opening a chequing account required my father’s credentials and a meeting with the bank manager, who explained my spending limits. For my first car loan—£30—the manager scrutinized everything: the vehicle, the seller, my purpose.

Today, impersonal algorithms flood students with credit card offers before they earn a paycheck.

The Interest Rate Obsession

Leaving interest rate control to bureaucracies misses the point: interest is the price of borrowing and should be market-driven. Naturally, someone parking a Rolls Royce in a bank basement gets better rates than someone living paycheque to paycheck. Risk matters.

Lenders must assess repayment ability. Both parties must understand there’s a tipping point: a failed loan means broken trust and lost community wealth.

Forget those who max out credit cards—because they think they’re smart enough to control compound interest, they deserve the fallout. But banks have failed miserably, deliberately, in due diligence. Their mass credit distribution is more a sting operation than lending. A few good lawyers should remind them of their responsibilities.

Rebuilding Banking from the Ground Up

The solution isn’t more regulation—it’s more banks. Smaller, community-driven institutions that combine financial services with education.

In my proposal, “SANNA: South Africa’s New National Army,” I suggest dividing the country into development zones under civilian executive authority. Each would support multiple community banks—at least one per 250,000 rural residents, two per 150,000 in high-density city areas.

These banks would return to relationship banking. Lenders would know their borrowers and what the money would be used for. Financial scrutiny would come with the loan, helping people avoid trouble before it starts.

Interest-free community project banks—like the Rhodesian model—would ensure viability and sustainability. Self-sufficient communities reduce pressure on social welfare budgets.

Financial Literacy: The Missing Curriculum

We must boost financial education at home and in schools. My kids bought sweets with allowance money, learning that desires have costs. For big stuff-a guitar, sporting tour—my grandkids negotiate savings plans and the how and when of matching contributions with their parents.

This “tough love” teaches money equals choices and that good ideas deserve support while impulses require restraint. These lessons apply equally in Wall Street and Soweto.

The Ancient Future of Banking

This proposal isn’t revolutionary—it’s restorative. Ancient banking was built on trust, mutual benefit, and accountability. The beekeeper understood it. Temple lenders did too. So did remote African lending offices.

Of course banking must be profitable, but business is not just about profits. It’s about enabling human potential through trust. When bankers know their borrowers, when communities share responsibility, and when rates reflect relationships—not just algorithms—local-level finance becomes a force for good.

The future of banking will look like its past: community banks empowered by technology, blending relationships with data. It’s time to reconnect your local bank to your dreams—and your community.