Telecommunications minister Siyabonga Cwele has indicated that the South Africa Post Office’s transition into a development bank will be\u00a0government’s first big step in radically transforming the financial sector and challenging the current ‘big four’ banking institutions.<\/p>\n
“It’s not going to be a normal bank like the big four. It\u2019s going to be a developmental bank to deal with the market that is not being served at the moment,” said Cwele in a Reuters <\/strong><\/a>interview at the\u00a0World Economic Forum for Africa on Thursday.<\/p>\n He added that despite higher risks involved, the\u00a0Post Office will also look at\u00a0funding entrepreneurs with small loans.<\/p>\n “We are going to need a very strong risk management system. The issue of financial inclusion is part of radical economic transformation. We are not talking about reckless access to finance.”<\/p>\n South Africa’s big four banks – Standard Bank , FirstRand , Barclays Africa and Nedbank – reportedly control about 90% of the market.<\/p>\n In contrast, a\u00a02016 survey by Finscope found that about 11% of the adult population were “financially excluded” or unbanked, accounting for more than 4.3 million adults.<\/p>\n SAPO CEO Mark Barnes indicated earlier this week that in addition to becoming a fully-fledged consumer bank in 2018, the state-owned enterprise was also in a position to deliver grants to millions of South African around the country.<\/p>\n \u201cWe followed cash from its source at Treasury to the end user point, and we didn\u2019t find anything in that delivery chain that isn\u2019t replicable at a fairly good cost,” said Barnes.<\/p>\n \u201cWe are an organ of state and the payment of social grants is a function of the state; so we can contract to protect people\u2019s data under instruction.\u201d<\/p>\n
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