Microfinance in the Banking
Sector
October 2011
Content
•
Overview of microfinance in the banking sector
•
Analysis of landscape
•
Drivers of change
•
Skills implications
Profile of microfinance
Source: NCR Register, August 2010
Provincial distribution of credit activity
Source: NCR Consumer Credit Market Report, December 2010
Estimated number of MFI employees
% distribution staff
Small enterprise financiers (mostly not for
profit)
3.8%
Cooperatives
1.0%
Incremental/Low cost housing
0.5%
Small micro lenders
37.3%
Large micro lenders
24.6%
Alternative banks (African Bank/Capitec/UBank)
Large/Commercial Banks
Source: NCR Registration August 2010 with RUDO estimates
31.6%
1.2%
Employee race profile
Source: Primary Research Interviews
Employee educational profile
Source: Primary Research Interviews
Range of financial services
Transact
Save
Borrow
Protect
The South African Microfinance Landscape
Drivers of change in the sector
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Economic and socio economic factors
Drivers of change in the sector
•
Political and social environments
– Speeding up growth and transformation to create decent work and
sustainable livelihoods
– Massive programme to build economic and social infrastructure
– Comprehensive rural development strategy linked to land and
agriculture reform and food security
– Strengthen the skills and human resource base
– Build cohesive, caring and sustainable communities (Address
inequalities and halve poverty and unemployment by 2014)
Drivers of change in the sector
•
Technological factors
– Competitiveness through technology
– National loan register no longer compulsory so no longer a source
of accurate information
– Cooperatives have mostly manual systems
– Those who have purchased sophisticated custom designed
software do not use it
Drivers of change in the sector
Legislative environment
Skills implications
•
A need for management talent
– Loan officers promoted through the ranks lack management skills
– Managers in commercial banks not familiar with business models for
serving low-income markets
– Paradigm shift – inclusive banking models that need managers with
entrepreneurial spirit
•
Credit Management, Legislation, Marketing and Compliance
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Cooperatives and ME lenders: Basic Accounting, Credit Management,
Corporate governance skills
Questions?