Limpopo Business 2016-17 edition

OVERVIEW
with branch networks, the percentage
of South Africans so
served grew from 50% to 80%.
In the “banked” category (more
traditional but including new devices),
the percentage grew from
46% to 75%.
With cellphone access in that
time having grown from 42% to
90%, one would expect that to
have been the main reason for
this growth, but that is not the
case. James Francis, writing for
Brainstorm, points out that of
the nine-million South Africans
who use mobile money, only 3%
fall in the LSM 1-4 category (ie,
poorer members of the population).
He writes that “mobile
money in South Africa has been
catastrophic”. However, the South
African banking sector’s excellent
infrastructure (plus the efforts of
the Big Four and Capitec to reach
out to new markets) has made up
for this failure.
Banks and cellphone companies
continue to believe that
they need one another. Vodacom
and Bidvest are working on the
mobile money M-Pesa scheme,
Standard Bank and MTN collaborate
on mobile banking and
there have been recent moves
linking Old Mutual and Telkom,
and Sanlam and African Bank.
(The “good” African Bank that is,
with the bank having been split
up into two entities after taking
on too much unsecured debt).
Sifiso Skenjana has noted in the
Sunday Times that African Bank
still has 400 branches and 150 000
people per month going through
these branches, so this represents
a huge potential market for a
financial services company.
Telkom is apparently hoping that its link-up with Old Mutual will prove
attractive to customers wanting funeral insurance.
Skenjana also points out that South Africa has a ‘stokvel’ (savings club)
market valued at R44-billion, and Sanlam recently launched new products
aimed at tapping into that market.
Among other recent innovations designed to reach the unbanked
were Teba Bank’s initiative that allows customers to deposit money at
supermarkets, Pick n Pay Go Banking (a division of Nedbank), the fact that
70% of Absa’s new ATMs (400 in one year) were visited in poorer areas and
the launch of two mobile banks, FNB also created mobile branches and
most of Standard Bank’s new sites were planned for townships (Finscope).
Absa’s partnership with Thumbzup allows shops to accept card payments
with smartphones and tablets. Introduced in 2012, the device
turns phones into terminals. In the same year, Absa took over Edcon’s
card portfolio, massively increasing the bank’s reach (Edcon brands
include Edgars, CNA and Jet).
Absa’s Entry Level and Inclusive Banking (Elib) branches have proved
popular, accounting for an increasingly high percentage of the bank’s
loans, despite still representing quite a small number of actual branches.
Nedbank has Approve-it, which allows customers to accept or
reject an Internet transaction by cellphone.
FNB has a wide range of cellphone-banking options and a Facebook
application whereby cellphone vouchers can be posted on the socialnetworking
site. The eWallet application converts the voucher into
cash or airtime.
Standard Bank’s community-banking initiative offers a low-cost
cellphone-banking service. Retailers can act as agents for the bank,
even in remote rural areas. Shops such as Shoprite, Pep and Spar are
connected, as are certain spazas.
Ubank is owned by a trust that is managed by the Chamber of
Mines and the National Union of Mineworkers (NUM). It has about 100
branches and an important presence in Limpopo because of its strong
focus on the mining sector. Ubank has about half-a-million clients.
ONLINE RESOURCES
Banking Association South Africa: www.banking.org.za
Financial Services Board: www.fsb.co.za
Institute of Bankers in South Africa: www.iob.co.za
National Credit Regulator: www.ncr.org.za
Office of the Auditor-General of South Africa: www.agsa.co.za
Ombudsman for Banking Services: www.obssa.co.za
Public Investment Corporation: www.pic.gov.za
81 LIMPOPO BUSINESS 2016/17