Banking and financial services

Agricultural app extends bank’s reach.

Absa Bank, which already has a strong presence in the agricultural market in South Africa, has bought shares in an e-trading platform. Khula! has three platforms that allow farmers and distributors to connect with exports and retail and wholesale buyers. More than 5 000 products are available on the Input Marketplace app.

Absa has previously supported Khula! through its Enterprise Development division and has worked with the app on standardising payment options. Abrie Rautenbach, Head of Absa AgriBusiness, says the acquisition will not only enhance Absa’s agriculture proposition for SMMEs, but allow Absa to further assist with the continued expansion of the Khula! proposition, potentially also into other African markets in which the bank operates.

African Bank, with an eye on listing on the JSE, completed its purchase of Ubank in 2022. When Ubank came out of curatorship in 2016, the SA Reserve Bank acquired its shares and invested R3-billion. The purchase will expand African Bank’s lending base by nearly five-million customers and comes on the back of the purchase of Grindrod Bank, which strengthened the bank’s business-lending operations.

Two new licences for mutual banking have been approved nationally, despite the collapse of VBS, a Limpopo-based mutual bank. The nature of the South African market lends itself to mutual banking. Both the Young Women in Business Network (YWBN) and Bank Zero will use the mutual model.

Discovery Bank officially launched in March 2019 and is experiencing rapid growth with deposits of R3.7-billion. Discovery Bank is applying the behavioural model it uses in its health business to reward good financial behaviour.

Another relatively new bank is Capitec. Investment holding company PSG has reduced its holding in Capitec Bank from 32% to 4%, earning about R4-billion by selling those shares.

TymeBank, one of the newer entrants onto the South African banking scene, is taking the concept of “retail banking” to another level. Having run banking kiosks within Pick n Pay and Boxer stores for several years, TymeBank has signed a deal with TFG, a group that has a big presence in the Eastern Cape.

Online Resources

Auditor-General of South Africa: www.agsa.co.za

Financial Sector Conduct Authority: www.fsca.co.za

South African Institute for Chartered Accountants: www.saica.co.za

Sector Insight

What used to be known as the Foschini Group has 34 brands, including Markhams, Totalsports, Jet and Dial a Bed, and 30-million customers. In the short term, TymeBank will have access to 600 TFG kiosks, taking the bank’s total in South Africa to 1 450.

The financial and business services sector is responsible of 19.2% of the Eastern Cape’s Gross Domestic Product (StatsSA). The sector provides employment for 141 000 people. Agricultural finance is an important factor in the Eastern Cape. Production loans, vehicle financing and revolving credit plans all play an important role in keeping farmers and agro-processors in business. ■