Are you about to pay lobola, throw umgidi (a cultural celebration), observe Eid or take part in Diwali festivities? African Bank has designed a financial product tailored to help South Africans save or borrow for traditional and religious ceremonies.
The 50-year-old institution that offers personal loans and other banking services, including financing for entrepreneurs, is launching Isiko — a product it describes as a “culturally grounded financial lifestyle solution”.
“Isiko puts savings and investment options — including group savings, credit and negotiation and bulk discount packages at your fingertips. It allows you to budget and save for your event, track your progress, and find the solution that will make your celebration a success,” said Sibongiseni Ngundze, CEO of the bank's personal banking division.
We listened closely to our customers and built a solution that honours tradition while offering the ease, security and flexibility of modern digital banking
— Unathi Mtya, African Bank group chief information and digital officer
Many people required funding for traditional mega celebrations and the bank had created Isiko “to bring financial control, clarity and dignity for when customers want to honour their traditions”.
CEO Kennedy Bungane said Isiko is part of the expansion of the group's innovation solutions and speaks to the cultural life stages of South Africans.
“We would not be a credible bank for the people by the people if we do not understand these life stages and if we do not have the offerings that support our people in this regard,” he said at the bank's financial results presentation this week for the six months ended March.
Isiko reflected African Bank's commitment to offering inclusive, relevant banking experiences, said group chief information and digital officer Unathi Mtya.
She said the product was a powerful example of how digital innovation and cultural relevance could merge to make an impact.
“We listened closely to our customers and built a solution that honours tradition while offering the ease, security and flexibility of modern digital banking. At African Bank, digital transformation is about designing solutions that evolve real problems in the lives of real people so that financial inclusion becomes a lived and shared experience for every South African,” Mtya said.
The bank's other digital products include Karabo 2.0, an intelligent chatbot wealth and customer wellness tool that integrates identification and verification.
African Bank announced that its customers had grown by 6% in the six-month reporting period to 6.1-million, driven by growth in both its personal banking and alliance banking platforms. Net profit after tax rose 15% year-on-year to R202m, which it said reflected the growing impact of its Excelerate strategy to transform the financial institution into a diversified, digital and scalable business.
Last year the bank announced its entry into the home loans business with the launch of a pilot solution for its employees in collaboration with SA Home Loans. It was also announced as the preferred bidder for the acquisition of Eskom's home loan book for R5.7bn late last year.
It has plans to launch a non-life insurance business, which will be extended to cover household contents and motor vehicle insurance.
In line with its planned initial public offering (IPO), African Bank completed an employee share ownership scheme during the period that will ensure bank employees own 10%. The group is now focused on concluding a management share scheme and the creation of a retail BEE scheme after the Government Employees Pension Fund (GEPF) decided to remain a long-term shareholder beyond the bank's listing.
African Bank has been on a turnaround journey since 2014 when losses at its parent company ABIL led to it being placed under lengthy curatorship. The Reserve Bank took up a 50% equity stake in the newly reformed bank, with a consortium of banks and the GEPF holding the remaining 50%. The central bank has since diluted its shareholding to 45% to enable the staff ownership scheme. The GEPF is also reducing its stake to 22.5% in favour of the staff ownership scheme.
FirstRand, Standard Bank, Nedbank, Absa, Investec and Capitec have also diluted their combined stake down to 22.5% to allow the employee scheme to take effect.
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