The Cape has a reputation for doing things differently and Capitec Bank’s head office, nicknamed “the campus”, in Stellenbosch is no exception. There is not a suit or tie in sight.
Capitec was formed in 2000 when micro-lending group PSG seized the gap in mass banking. It was the country’s first new retail bank in 20 years. With about 13-million South Africans unable to afford traditional banking it provided a much-needed service.
CEO Riaan Stassen once visited the Reserve Bank dressed in his usual casual style and explained to the suits he was meeting that his next appointment was in Pretoria’s Soshanguve township. “I spend at least a week a month in the field. I’m not scared of walking the streets of Khayelitsha or Soweto,” he says.
This hands-on approach is followed by staff at all levels of the company. Employees are expected to leave their air-conditioned offices and get out to where their customers live and work. “We do promotions in the streets, at the taxi ranks. We expect our managers to distribute flyers, to speak to [potential] clients,” says Stassen. And this is one bank that doesn’t close its doors at 3pm — banking hours are 8am to 5pm.
Simplified banking at low cost is the core, as is changing customers’ attitudes, particularly those who avoid banks altogether or see them as just a place to draw their wages. Â
Innovation is the chosen route. A pilot project currently under way at Phuthadjitjaba in the Free State uses a pre-approved debit card in conjunction with MasterCard, a world first for the international credit provider.
Each of the 5 000 card holders loads cash onto a card, which is then debited at supermarket tills. Customers have a device that looks something like a garage remote control, which they use to read the balance on their card. Each transaction costs 50c, and also saves retailers money because the card does not require on-line point-of-sale machines.
Capitec took almost three years to prepare for fully-fledged banking services, which it launched last year. The timing was difficult, coinciding with the disappearance of small banks such as Boland and BoE. Its 2002 listing on the JSE Securities Exchange, after unbundling from PSG, came two weeks after the Saambou collapse.
It became clear that traditional financing arrangements would not suffice to get the bank off the ground. The United States Agency for International Development came on board with a guarantee that allowed Capitec to borrow R50-million to set up.
In the past 18 months 210 of Capitec’s 250 branches countrywide have been converted into fully-fledged banking halls — complete with ATMs, corporate logos and staff uniforms. Personal interaction is key and staff aren’t cut off from clients by bullet-proof glass. “It’s not: You’re there, I’m here. I’m a fancy banker, you’re the guy from the street,” says Stassen.
He says the bank shies away from classifying its customers in terms of their income levels, but focuses on serving people who require basic, low-cost banking.
This approach is paying off if the August 2004 unaudited interim results are anything to go by. The share price increased by 63%, earnings by 72%, and a BEE share sale deal was struck with Arch Equity, which already owned a 13,85% equity stake.