Mpumalanga Business 2017-18 edition

OVERVIEW Banking and

OVERVIEW Banking and financial services Several new banks are set to open soon. Three state entities are merging to create the new Human Settlements Development Bank: the National Housing Finance Corporation, the Housing Loan Fund and the National Urban Reconstruction and Housing Agency. The focus will be on financing housing for poorer households and for large state-funded housing projects. Part of the drive is to integrate cities better and to combat the legacy of the spatial divide that apartheid left behind. Private sector investment will be sought. Another state entity, the South African Post Office, received a firstlevel banking licence for Postbank in 2016. Once a board of directors has been appointed and a company formed, the Reserve Bank is likely to grant the full licence. The large geographical footprint of the Post Office will make the bank easily accessible to even remote parts of the country. By taking these services to rural areas, it is hoped that small businesses can be more easily created and expanded where they already exist. 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 intention behind these initiatives is to make banking more accessible for rural communities and to make finance more readily available to small and micro-sized businesses. Mpumalanga has SECTOR INSIGHT The Human Settlements Development Bank seeks to help new home owners. many rural communities and the province’s economic planners are keen to promote small businesses and co-operatives. Trying to integrate small business into the mainstream economy is a major goal of national and provincial government in South Africa. Life insurer MMI Holdings is also entering a partnership with African Bank to enable it to start taking deposits and loaning money. It intends to establish a R10-billion loan book. MPUMALANGA BUSINESS 2017/18 54

OVERVIEW For many decades, South Africa had a retail banking Big Four – Standard Bank, Nedbank, Absa/Barclays and First National Bank. All of them have continue to have a strong presence in the province, but Capitec Bank has now also become a major player in the retail market. Banks are working hard to offer products to the previously unbanked. Nedbank has partnerships with shops such as Boxer Stores and Pick n Pay where customers can have access to financial services in previously unserviced areas and also on all days of the week such as public holidays and Sundays. Nedbank also has Approve-it, which allows customers to accept or reject an Internet transaction by cellphone. Standard Bank’s communitybanking initiative offers a lowcost cellphone-banking service. Retailers can act as agents for the bank, even in very remote rural areas. Shops such as Shoprite, Pep and Spar are connected, as are certain spazas. With agriculture being such an important part of the Mpumalanga economy, each of the big retail banks has specialists in the province and dedicated units such as Nedbank Agribusiness. Another source of funding for farmers is the Land and Agricultural Development Bank of South Africa (Land Bank), a development-finance institution that falls under the Ministry of Finance. Standard Bank has a new black economic empowerment agricultural fund designed to support emerging farmers. The R500-million fund is designed to connect farmers who have received farms in land reform projects to agri-businesses that will buy their produce. The Masisizane Fund (Nedbank) makes loan financing available in sectors such as agriculture and agri-processing, commercial, supply chain and manufacturing. It also offers training and technical support and funding to help businesses to comply with legislation. The insurance market has become more varied over time, with a greater variety of products now available to more market segments, including middle-income earners. A typical example of a specific product that is responding to new realities is Old Mutual’s iWYZE medical gap cover, designed to pay the difference between what a medical aid scheme is willing to pay and what the hospital or doctor is charging. ONLINE RESOURCES Auditor-General of South Africa: www.agsa.co.za 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 Insurance South Africa: www.insurance.za.org Land and Agricultural Development Bank of South Africa: www.landbank.co.za National Credit Regulator: www.ncr.org.za Office of the Auditor-General of South Africa: www.agsa.co.za Post Bank: www.postbank.co.za Public Investment Corporation: www.pic.gov.za 55 MPUMALANGA BUSINESS 2017/18