Allowing Post Office to extend credit is inherently risky, warns BMI Research
Allowing the Post Office, via the Postbank, to extend credit is likely to make it yet another state-owned enterprise in need of a hefty bail-out, BMI Research warned in a note on Tuesday. The government recently decided to step up its activity in the banking market by expanding the Post Office’s licence to allow its Postbank subsidiary to offer credit. Historically, Postbank was only permitted to offer savings accounts, not make loans. Although SA scores highly on measures of basic financial inclusion, with 70.3% of the population having access to a bank account, only 12.1% of the population accessed credit through a financial institution as of 2014 data.
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