Banking and financial services

Banking and finance

New banks are entering the market.

Tyme Digital went from acquiring a licence to running TymeBank with services available in more than 500 Pick n Pay and Boxer stores in less than two years.

Tyme reported in October 2020 that it had 2.4-million customers, up from 1.4-million at the end of March. A 400% increase in the use of services such as airtime and electricity purchases was also noted.

Second to market among the country’s new banks was Discovery Bank, which officially launched in 2019 and is experiencing rapid growth with retail deposits at the end of 2020 of R5.7-billion. Discovery Bank is applying the behavioural model it uses in its health business to reward good financial behaviour. The Discovery group is already a giant on the JSE with a market value of R83-billion and access to millions of customers.

The appetite for mutual banks is strong, given the nature of the South African market. The Young Women in Business Network (YWBN) intends applying for a mutual bank licence and Bank Zero will use the mutual model.

South Africa’s four big retail banks (Nedbank, Absa, Standard Bank and First National Bank) have a solid presence in the major towns in the province. Standard Bank’s agricultural specialists cater to all aspects of the value chain and make facilities available to exporters, including foreign exchange and hedging fluctuating foreign currencies.

Capitec is rapidly moving towards being part of a Big Five and it has announced that it will partner with Centriq Life to enter the insurance market. Agriculture is an important focus area for banks, and most have specialised divisions. Piet Retief-based TWK Agri offers financing and insurance together with the usual suite of agricultural services. Afgri, one of the country’s biggest agricultural companies, offers financial services (financing and insurance) under the brand Unigro.

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.

African Bank has created an account that allows up to five additional accounts to be created in the name of the main account. Fees are only charged for drawing cash or at the time of a transaction. There are no monthly fees for any of the accounts which can be either for saving or transactional. Each user has his or her own card and monies can be moved between accounts, ideal for families. ■

ONLINE RESOURCES

Financial Sector Conduct Authority: www.fsca.co.za Public Investment Corporation: www.pic.gov.za South African Reserve Bank: www.resbank.co.za SECTOR INSIGHT Agricultural companies offer financing.