Despite robust regulation, the South African banking sector has had its dramas over the years and four banks have gone belly-up in the past 20 years. In 2002, Absa's small-loans subsidiary UniFer, which serviced the low-income market, announced losses that sparked a run on deposits at Saambou and then at BoE. In 2014, African Bank collapsed due to reckless lending practices and was placed under curatorship by the Reserve Bank. These disruptions illustrate the risks of operating in a third-world environment. Unsecured lending provides the mass market with access to credit, essential for economic activity and critically important for financial inclusion. But in a low-growth economy, with high unemployment and widespread poverty, even the best regulation and smartest business models will be challenged. There is an argument that to ensure a more stable banking sector, the large lenders, in particular the big four - Barclays Africa, Nedbank, FirstRand and Standard Bank - should not parti...
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