3 big new banks to enter South Africa by 2018
The banking sector in South Africa is about to get exciting. Three new banks are set to enter the market, which will provide new banking options, making the market a lot more competitive. Currently, South Africa is dominated by the following banks:
Since February this year, Capitec has gained 400 000 new customers, making them the second biggest bank in the country. Capitec gained this success by targeting entry-level users and providing them with competitive banking options. This forced South Africa’s other banks to compete more effectively by launching similar entry-level banking options.
Billionaire Patrice Motsepe announced that his intention to challenge South Africa’s biggest banks with investment company, African Rainbow Capital (ARC) close to securing a banking license.
In 2016 the South African Reserve Bank (SARB) granted Tyme a provisional banking license with the expectation of receiving a full licence by September 2017.
Johan van der Merwe, co-CEO of African Rainbow Capital reported stated: “The South African banking environment is due for a bit of disruption.”
Discovery will be launching banking products in the coming year, after having received authorisation in March 2017 from the Registrar of Banks to establish banking operations in South Africa.
Adrian Gore, Discovery CEO, first announced plans for a retail bank in 2015, and stated that it would act as a direct competitor to Absa, FNB, Nedbank, Capitec, and Standard Bank. Discovery has an advantage over the big four traditional banks, as it does not have to maintain a country-wide network of branches and ATMs. This means Discovery Bank’s costs have the potential to be lower than its competitors.
The South African Post Office
The South African Post Office (SAPO) is aiming at transitioning into a development bank as a step towards transforming the South African financial sector. Their target market will be the “market that is not being served at the moment” as well as funding loans to entrepreneurs, according to Telecommunications Minister Siyabonga Cwele, who spoke at the World Economic Forum in May.
With more institutions coming into the market South Africans will have access to more competitive banking and financial services, which could also translate into lower banking fees and better interest rates. Sounds good to me.
Read more about the banking sector in South Africa:
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