Point of view: Capitec Banks eyes informal SME segment

Capitec bank said it wants to be the leading bank for SMEs in South Africa. Picture: Lubabalo Poswa, Independent Newspapers.

Capitec bank said it wants to be the leading bank for SMEs in South Africa. Picture: Lubabalo Poswa, Independent Newspapers.

Published Mar 25, 2024


Capitec Bank says there is an opportunity to tap into the informal Small and Midsize Enterprise (SME) segment in South Africa, and it hopes to win a market share of it.

Speaking at the Personal Finance Media Day in Stellenbosch, Capitec marketing and communications group executive Francois Viviers, said: "We do believe the opportunity is not just to get a slice of the pie but to grow the market for formal banking for SMEs. We do want to compete aggressively in the formal SMEs segment and win a market share there, but we want to be the leading bank for SMEs in South Africa in a short space of time, and we believe that there is a lot of opportunity to give a simple transparent affordable solution for underserved people".

He said there were 2.5 million SMEs and 750 000 were formalised and banked, and about half of them paid tax.

"We think there is double that in the informal sector, and we have seen in our research that there are people who are operating in township areas who provide fresh food to the market or provide transport, own a couple of hair salons or run a Tshisanyama, that have high turnover all of it cash and they are not included in the formal banking space

“ We believe if you can include them by enabling their digital payments, creating visibility of their turnover, then that creates a possibility for us to provide funding that they can use to grow their business. That is where we see an opportunity".

Meanwhile, Capitec’s Head of Financial Education, Jean Rossouw, said the digital bank fraud statistics were “out of this world”.

According to a survey, about 49% of the losses were banking app related. She said it was mostly people parting with their money because of someone they didn’t know, that they though was an authentic seller.

"What we are seeing is that phishing is still a big thing, it is not stopping and the scammers continually evolve their MO. It started with sharing their pins and asking clients to share their confidential information. These people are extremely sophisticated, they are so convincing.

"The key thing we are trying to say is that your bank will never ask you to perform a transaction or ask you to share information to stop fraud, or debit order or whatever the case".

She advised that whenever people were in doubt, they should call the bank to verify.

"That's key because sometimes you don't know, so it is better to call the bank first and check before providing your information," Rossouw said.

Viviers said the problem occurred when people accessed other people's money by social engineering. People consciously sharing their information while authenticating a transaction on the banking app because they were duped by the caller.

"We are tackling this by continuous awareness and education, but also by innovating. We recently launched a feature in the app that when you are on a call, when you open the app, there is a banner appearing at the top, that verifies the number that you are in a call with, and we tell you, yes you are on a call with Capitec, or red, you are not on the call with us, and that immediately helps reduce that,“ he said.

* Maleke is the Personal Finance Content editor.