Business Day
*Postbank 'not the answer' for unbanked*** *Phakamisa Ndzamela, Business Day, Johannesburg, 25 September 2012 *THE Banking Association of SA has criticised the idea of positioning Postbank as a rival to commercial banks, saying it had limited capacity to aggressively drive financial inclusion.
The banking association has called on Postbank to form partnerships with commercial banks and allow them to use the government's post office infrastructure to extend financial services to the underserved.
There is a belief that partnerships will save the South African taxpayer a lot of money as the commercial banks would bring in the better capacity and systems.
Postbank is in the process of applying for a fully fledged banking licence.It has already appointed to its board former Absa retail banking boss Venete Klein and Dr Thabo Mosala, a banking and finance academic.
Sim Tshabalala, the chairman of the banking association and CEO of Standard Bank, said on the sidelines of a financial inclusion indaba on Friday that research had shown that a state-owned bank had limited capacity in driving financial inclusion.
"The evidence gathered by the World Bank in its comprehensive 2007 study shows that state-dominated banking systems produce lower levels of financial inclusion than do banking sectors that contain well-regulated, vigorously competing private sector banks.
"There is a much more constructive way to use post office infrastructure to advance financial inclusion than by setting up a public sector rival to the existing private banks."
Mr Tshabalala said there was a lot to learn from Brazil where the national postal service formed 10-year partnerships with large private sector banks. "Each decade, the private banks bid for the right to provide a full range of banking services through the Brazilian post office's large network of branches.
"These partnerships have proved extremely successful --- both in terms of its reach and its profitability. A 2008 study showed that this approach had brought financial services to 12.4-million Brazilians who had previously had no convenient access to banking.
"It was shown to have had positive impacts on entrepreneurship and employment in the municipalities reached by the partnership."
Postbank believes the commercial banks are calling for collaboration to stifle competition. "We don't want them to come to our space," said Postnet chief financial officer Nichola Dewar.
"(The) Post Office needs Postbank to remain financially viable. We want to make a difference ourselves."
Ms Dewar said the call for collaboration was not partnership-driven but was meant to safeguard the profit interests of the commercial banks.
Some observers believe that Postbank can compete, especially if it encouraged public servants to use it as their primary bank.
*****From: http://www.bdlive.co.za/business/financial/2012/09/25/postbank-not-the-answer-for-unbanked **
*** *** * *Banks eye 'billions under mattresses'*** *Phakamisa Ndzamela, Business Day, Johannesburg, 25 September 2012*WHILE SA's banks have made good progress in providing financial services to the unbanked, the big challenge now is how to channel about R12bn kept under mattresses into the banking system, says Cas Coovadia, MD of the Banking Association of SA.
"We have made a lot of progress on the personal side.... The trick is how do we provide the distribution channels and bring money into the system and for people to have the ability to make choices about products," Mr Coovadia said on the sidelines of a Financial Inclusion Indaba on Friday.
The indaba came on the heels of a global forum hosted by the Alliance for Financial Inclusion in Cape Town. The principles of financial inclusion ensure that people, especially those in the low-income end, are given access to financial services like banking, credit and insurance.
In SA, about 63% of the population are financially included.Finance Minister Pravin Gordhan wants 70% of the population to be financially included by next year and the National Development Plan by Minister in the Presidency Trevor Manuel is targeting 90% by 2030.
One way to bring the R12bn hidden under mattresses into the banking system was by using the facilities of the Post Office and Postbank. The Post Office has more than 2,000 outlets across the country.
Mr Coovadia said collaboration between the Postbank and commercial banks was critical. He said it was important that commercial banks be allowed to use the Postbank infrastructure to extend financial services to those that are not covered.
However, the Postbank believes it is well suited to cover the unbanked without collaboration. At the same time, commercial banks such as Standard Bank and Absa have been opening bank facilities in spaza shops in townships and rural areas to extend financial services.
Carlos Moya, a director in the presidency in Colombia, told the indaba that Colombia had made progress by making financial inclusion a priority of national government. Mr Moya said one of the solutions was for the government to give incentives to commercial banks that went to dusty areas to extend financial services.
He said Colombia's financial-inclusion statistics had moved from 47% to 65% in five years. However, despite such progress, there have been concerns that small and medium-scale enterprises (SMEs) are not adequately covered.
Commenting on this, Mr Coovadia said the problem was not availability of funds for SMEs, but capacity. He said between 2003 and 2008, banks in SA had lent about R5bn to SMEs, a figure higher than financial sector code targets.
Mr Coovadia said banks had financed 96% of SMEs, but 70% of new start-ups still failed.
*****From: http://www.bdlive.co.za/business/financial/2012/09/25/banks-eye-billions-under-mattresses **
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