Postbank will seek to finance the informal economy, such as spaza shops and homeowners who have no title deeds, by adopting a different approach to lending, says South African Post Office CEO Mark Barnes. "The informal economy is being financed, just at the wrong price. If we could do it at the right, market-related prices, we would grow the middle class and expand the country’s tax base," Barnes said this week. His comments come as traditional banks are being criticised for their perceived reluctance to extend loans to small, black-owned businesses — a perception that was challenged by FirstRand CEO Johan Burger. Over the past three years WesBank, FirstRand’s vehicle and asset finance business, had extended R7.1bn in loans to small and medium-sized black enterprises, Burger said. Lenders are regulated by the National Credit Amendment Act, which requires them to undertake strict affordability assessments of prospective borrowers before granting a loan. This includes securing three m...
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