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agreements, to ensure that the material
is understandable and written in plain
language and the terms and conditions
are reasonable. Pamphlets summarise
the client’s rights and obligations as a
client of African Bank, and material
received by the MFRC and Office of the
Banking Adjudicator on consumerrelated
issues are regularly distributed at
branch outlets. African Bank runs
campaigns for staff on customer rights,
including campaigns on the MFRC rules,
the code of banking practice and the
seven internationally-recognised rights of
consumers. The group supports client
rights as an associate member of the
South African Consumer Union, and each
year, it celebrates International
Consumer Rights Day on 15 March –
both with staff through internal activities
as well as with clients through the branch
outlets. In 2002, African Bank received
the MFRC award for consumer
education.
During the past financial year, African
Bank Retail initiated a major campaign to
improve its complaints handling service
to clients. Under the banner “Zama
Icebo” (Just Do It!), more efficient
processes were put in place to provide
an efficient and speedy resolution of
complaints and keep clients informed.
The philosophy for resolving complaints
is based on respect for client rights,
balancing the interests between the
group and its clients, and ensuring
that it acts fairly in all its dealings
with clients.
The group ensures that clients know
where to complain by providing contact
details on each loan agreement, a copy
of which is given to the client. These
details include the African Bank
telephone and facsimile details, as well
as those of its regulator (the MFRC) and
the Office of the Banking Adjudicator.
Posters detailing its internal complaints
procedures and those of its regulators
are displayed in all branches.
During the review period, African Bank
received an average of 9 095 queries per
month nationally, ranging from allocation
of payment requests, changing bank
details, querying the progress of a loan
application, or challenging a loan
application rejection, to more
complaints-oriented matters such as a
request for a refund or a challenge of the
terms of a loan. Most of these queries
emanate directly from clients and with
the Zama Icebo campaign, the focus is
on a speedy (currently 48-hour) response.
Going forward, African Bank will focus on
systems enhancement which will ensure
a speedier response time, and lead to a
decline in the number of
queries/complaints received.
Complaints received during the past year
from the MFRC and banking adjudicator
average 7 and 17 per month respectively
(totalling 87 and 209), and African Bank
has received commendations from both
institutions on its service levels.
Client care
At client-interfacing levels, a training
programme called Tholulwazi (Be
Informed) was introduced. The objective
was to highlight the desired excellent
client focus and ensure it becomes
entrenched as part of the African Bank
experience and culture. The training is
ongoing and has been successful.
Government and
parliament
ABIL conducts business in the low-income
segment of the market in South Africa.
This represents, by and large, the poorer
and thus more vulnerable people within
the socio-economic fabric of our society.
Given the history of micro-lending in
South Africa and the historical stigma
that has been associated with the
industry, ie that lending practices in the
industry tend to exploit poor
communities by charging exorbitant
interest rates, government has a
particular concern about the industry.
This makes it imperative that relations
with the relevant stakeholders are
proactively pursued to ensure a
separation of incorrect perception from
the actual reality on the ground.
The group has taken the view that to
operate sustainably in the market, there
needs to be a closer working relationship
between ABIL, government (and relevant
agencies) and parliament. Much effort
has therefore gone into cultivating
existing relationships and starting new
ones where necessary. Relations have
been strengthened over the past year
and the group will continue to build on
these in future. As example, discussions
have been held with the National
Department of Housing to explore its
vision of dealing with the legacy of lack
of credit for housing to low-income
groups in South Africa. Meetings were
also held with the Department of Trade
and Industry and Department of
Transport, amongst others.
ABIL is also an active participant in the
regulatory review process initiated by
government and discussed in the letter
to stakeholders.
Suppliers
African Bank’s non-discretionary
expenditure amounts to 85% of
operating costs. This covers employment
costs and commissions (50,5%), property
costs (7%) and other costs such as audit
fees, depreciation (6%) and bank
charges.
Discretionary expenditure constitutes
15% of the operating budget, of which
50% is spent with empowerment
companies.
Over the last year, the company has
actively continued its commitment to
support empowerment companies. The
process was informal in the past but has
now been formalised, with systems in
place to monitor and evaluate progress.
Research into the bank’s procurement
policies and procedures enabled it to
assess the status quo of empowerment
contracts throughout the company. Part
of the assessment entailed suppliers
submitting their employer and employee
profiles, employment equity figures, and
employment equity strategies. Suppliers’
empowerment management figures
range from 20% to 62% and
empowerment staff complements range
from 37% to 81%.
More alignment will take place as all
divisions are divisionalised into African
Bank. The Credit Indemnity operation is
currently reviewing its practices and
procedures to bring its procurement
policy in line with the group. One or two
subsidiaries, such as Commercial Vehicle
Finance, have minimal discretionary
expenditure and suppliers are used on
an ad hoc basis.
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African Bank Investments Limited