OVERVIEW Banking and
OVERVIEW Banking and financial services Financing for agricultural products is a big sector in the North West. SECTOR INSIGHT Miners are getting help to deal with debt. • Postbank’s full licence is imminent. All of the country’s major banks and financial institutions are represented in the North West. Financial services are available even in small towns, although the bigger cities like Potchefstroom, Rustenburg and Klerksdorp have a greater concentration and diversity. Financial services extend beyond advising rich people on how to invest their assets, or balance their portfolio. In a province where there has been some real financial distress brought about by bad times and retrenchments, something is being done to address this. A long strike in 2012 created tough conditions for some workers in the platinum sector. Anglo American Platinum has teamed up with Summit Financial Partners to help miners manage their debt and plan their finances better through a scheme called Nkululeko. Garnishee orders went down among the Nkululeko group by 80% between 2011 and 2016. In 2016, Summit won a Constitutional Court judgement to the effect that the judiciary must keep an eye on emolument attachment orders (garnishees) to make sure they are fair. It had earlier been found by a High Court that some orders were grossly unfair and exploitative. Summit has an office in Hartbeespoort. The Association for Savings and Investment South Africa is behind another initiative called Project Qaphela, a financial literacy programme aimed at workers in the mining sector. The curriculum covers budgeting, saving, borrowing, understanding documents such as payslips and benefit statements and preparations for retirement. Partners in the programme include the National Union of Mineworkers, Sanlam and Coronation. In 2015, 822 workers attended 29 workshops in Gauteng, Limpopo, Mpumalanga and North West. Ubank is owned by a trust that is managed by the Chamber of Mines and the National Union of Mineworkers (NUM). It has several branches in the North West. The Chartered Institute for Government Finance, Audit and Risk Officers trains and rewards entities such as city councils for clean audits. Dr Ruth Segomotsi Mompati District Municipality won an award in 2016 for risk management. In a province with a high proportion of rural citizens such as North West, the prospect of Postbank being upgraded to a full-service bank is positive news. In 2016 the bank (part of the South African Post Office, SAPO) received a first-level NORTH WEST BUSINESS 2017 40
OVERVIEW licence. Once a board of directors has been appointed and a company formed, the Reserve Bank is likely to grant the full licence. The current Postbank focusses on taking deposits and savings accounts. Postbank has secured a R3.7-billion loan to enable it to open its own loan book. The large geographical footprint of the Post Office will make the bank easily accessible to even remote parts of the country. Finscope’s 2014 survey of South African banking and financial surveys shows that between 2004 and 2014 a remarkable eight-million people were connected to the financial system in some way. Overall, the “financially included” reached 31.4-million (up from 17.7-million in 2004). In a category called “formally served” which includes services other than formal banks 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 agriculture being such an important part of the North West economy, each of the Big Four banks has specialists in the province and dedicated units such as Nedbank Agribusiness. Focus areas for this unit are agronomy (grain, oil seeds, sugar and cotton), livestock (including game farming), horticulture (fruit and vegetables, for example), and secondary agriculture which covers agricultural processing and storage. Standard Bank has a R500-million black economic empowerment agricultural fund designed to connect farmers who have received farms in landreform projects to agri-businesses that will buy their produce. Another source of funding for farmers is the Land and Agricultural Development Bank of South Africa (Land Bank), a developmentfinance institution that falls under the national Ministry of Finance. The large agricultural companies all have finance divisions. CertiSure is a joint venture between NWK and Senwes that offers short-term insurance, crop insurance, financial planning, medical funds and funeral policies. Senwes Credit is a registered credit provider which offers asset financing in collaboration with Wesbank. Temo Agri (a division of Brits-based Magalies Graan Korporasie) and Noordwes Korporasie (Lichtenburg) have received the backing of the Industrial Development Corporation (IDC) to enable them to roll out agricultural credits to emerging farmers. The Royal Bafokeng Nation, a community of about 150 000 people living on platinum-rich land north-west of Rustenburg, is a shareholder in a large banking group and several of South Africa’s insurance companies through its investment company, Royal Bafokeng Holdings (RBH). South Africa’s “stokvel” (savings club) market is worth about R44-billion: Sanlam is developing products to tap into that market. Among innovations designed to reach the unbanked were Teba Bank’s allowing customers to deposit at supermarkets, Pick n Pay Go Banking (a division of Nedbank), 70% of Absa’s new ATMs (400 in one year) in poorer areas and Absa launched two mobile banks, FNB also created mobile branches and most of Standard Bank’s new sites were planned for townships. Standard Bank’s community-banking initiative offers a low-cost cellphone-banking service. Retailers can act as agents for the bank, even in very remote rural areas. Nedbank has Approve-it, which allows customers to accept or reject an Internet transaction by cellphone. ONLINE RESOURCES Auditor-General of South Africa: www.agsa.co.za Association for Savings and Investment South Africa: www.asisa.org.za Banking Association South Africa: www.banking.org.za Chartered Institute for Government Finance, Audit and Risk Officers: www.cigfaro.co.za Financial Services Board: www.fsb.co.za Public Investment Corporation: www.pic.gov.za South African Reserve Bank: www.resbank.co.za 41 NORTH WEST BUSINESS 2017
