Ockie
Resident Lead Bender
Capitec Bank CEO Gerrie Fourie says opportunities abound in the secured credit market with unsecured loans.
For example, he says, people can be enabled to build houses although they might not be able to get title deeds.
Fourie believes unsecured lending is playing an important role in developing South Africa, particularly where title deeds are not available for property and “you need to do something completely different”.
“We regularly receive photos from clients of houses built on [traditional free-hold land], where they haven’t got a title deed,” Fourie told Business this week after the bank issued results for the 12 months to February 2015.
“We believe we can still penetrate the market.”
Although more traditional banks are not keen on financing older cars, Capitec provides unsecured loans to people buying second-hand vehicles. And although the bank is not exactly looking to finance flats in Sandton, it offer loans of up to R200 000 over 84 months.
Fourie said Capitec was comfortable, given current economic conditions, to remain at this level. “If you want R500 000 loans with longer terms, you need more stability and information to make that call,” he said.
Over the 12 months to February 2015, the number of unsecured loans advanced by Capitec fell 7% to 2.8 million, while the value of loans advanced grew 7% to R19.4 billion.
The bank had seen a “big uptake” in people earning more than R15 000 a month taking out unsecured loans, he said.
Almost a quarter of loans granted were to people earning more than R20 000 a month, “proving the importance of unsecured lending” not only to low-income earners.
Alongside building homes, Fourie said many loans fund education – not only tuition but, for example, the costs of accommodation when children move from rural to urban areas.
With 6.2 million active clients and 670 branches, Fourie said Capitec had a “very nice power base” to diversify.
Carl Fischer, executive of marketing and corporate affairs, said Capitec would not grow into corporate and business banking, but was on track to launch its credit card offering to retail clients early next year.
“The vision was always to be a retail bank for individuals,” said Fourie. “This whole focus of moving to primary banking clients and into the retail space is 100% in line with the vision we set for ourselves when we started the company.”
During the year, the number of Capitec’s primary banking clients who made regular deposits (mostly salaries) and transacted regularly grew by 578 000 to 2.8 million.
Capitec boasts nearly 17% market share in the primary bank space, and Fourie expects this to climb to 20% soon.
http://citizen.co.za/351574/capitec-keeps-focus-on-the-little-guys/
Good grief. How difficult is it to launch a credit card. They been talking about it for 3 years now.
Other than that, I am very happy with them.