Banking
Banks are making an effort to introduce the North West’s rural population to banking.
In the North West’s major towns, well-equipped banks and companies in the financial-services sector offer a comprehensive service. Competition is stiff in developing new strategies to incorporate the emerging second economy and rural, unbanked communities. Rural people are often members of burial societies or saving groups (stokvels), but products such as the Mzansi account for low-income earners are attracting them to formal banking.
The number of clients using cellphone banking is growing rapidly. In July 2009, both Absa and First National Bank (FNB) surpassed the one million mark for customers in this market.
In most parts of South Africa, retail banking is very much the preserve of the ‘Big Four’ – Standard Bank, Nedbank, Absa and FNB.
Innovation is the name of the game in reaching new markets and helping small businesses grow. FNB’s commercial division has a New Business Banking unit, which provides tailored solutions for start-up businesses.
The North West’s banking consumers have had opportunities to learn more about the sector. Nedbank held a ‘Money School’ in Mafikeng in 2009, a course designed to provide basic information to people who have previously not used banks. FNB has hosted ‘Be Financially Smart’ workshops in Rustenburg and elsewhere.
Insurance
Life assurance is a small market (3.8 million people have life cover) with a massive potential for growth – there are 32 million adults in South Africa. According to Finscope, the number of people belonging to burial societies decreased in 2008 to 25%, from 29% the previous year.
Finscope’s 2008 survey of the financial industry stated that there is ‘an overall lack of insurance products’ and that South Africans are ‘generally
underinsured’. Vehicle insurance is the most popular product, at 7%. Clearly there is a large market waiting to be tapped if the industry can come up with affordable products. Metropolitan Life, a company that explicitly targets the lower and middleincome markets, is active in the North West.
