July 13, 2024

Ithala Continues To Drive Economic Participation For Marginalised Citizens

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For Ithala SOC Limited to reach its full potential, it must get a permanent banking license.

FILE PHOTO: Ithala SOC Limited office in Durban, the bank has become instrumental in rural communities. PICTURE: Supplied

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This belief and need demonstrated by the people we serve confirm the relevance of Ithala’s continued existence, WRITES DR THULANI VILAKAZI

The concept of a bank for the people by the people sounds like a noble idea. In a country with a history where the majority of its citizens were excluded from the mainstream economy and continue having limited access to economic opportunities and banking services, the realization of this concept is paramount.

Building an inclusive economy where all citizens actively participate, whether in a rural or urban environment, requires a mindset shift on providing banking services as a catalyst in achieving an inclusive economy.

For over two decades, Ithala SOC Limited (Ithala) has been playing this role and has stood the test of time with all the challenges it has faced, some of which are a consequence of the legislative setup that it operates under, having to comply with the Banks Act, the Public Finance Management Act (PFMA) and a restrictive Banking License Exemption Notice.

The biggest beneficiaries of Ithala’s success and resilience to continue navigating these challenging territories are its customers, the people of KwaZulu-Natal, many of whom are from the deep rural areas and townships.

This belief and need demonstrated by the people we serve confirm the relevance of Ithala’s continued existence. It also gives us the strength to serve our people and to be the catalyst for the change we want to see in our country, helping create wealth and transforming people’s lives.

Over the past two decades, we have played our role diligently, and we remain the only financial institution that operates the way we do, placing the needs and circumstances of marginalised people at the center of how we provide financial services.

What does this mean in simple terms to the people of KwaZulu-Natal and South Africa?

  • Ithala has been providing access to financial services and insurance to marginalised people who continue to have limited access to these services from traditional players in the market. Ithala SOC Limited has provided finance of approximately R2.2 billion to people in the rural and township areas to buy a home, car, taxi, education, and other essential needs. Some of the homes we finance are on tribal land, where no other financial services organization does.
  • Helping people to save and create wealth. We do this through our financial education programme Ithala Money Talks (link to the wealth creation Ad on www.myithala.co.za). Currently, we have over R2.5 billion in customer deposits. This is a clear indication that our efforts to educate people about saving and creating wealth are paying off. Overall, we see positive behaviour change when it comes to managing money.
  • We have a footprint of 38 branches in KZN, and in some areas, we are the only financial services institution. Ithala’s presence in these areas not only helps the communities access financial services but also helps with creating employment and stimulating the local rural economy.
  • Responding to the COVID-19 pandemic by launching an online education platform IthalaEduPlatform to assist grade 12 learners during lockdown to prepare for their exams. Ithala Education Platform has grown beyond the Covid period and continues to benefit the youth throughout South Africa www.myithala.education

Ithala’s current banking license Exemption Notice, which is an interim mechanism that allows Ithala SOC Limited to conduct the activities of a bank without a permanent banking license, limits our ability to scale up our activities and offer more services. For Ithala SOC Limited to reach its full potential, it must get a permanent banking license.

This is also a view supported by the Prudential Authority (PA) that will bring Ithala in line with other regulated banks that operate with full banking licenses. To this effect, we have submitted our application for authorisation to apply for a banking license, and we are awaiting Prudential’s consideration of our application.

We remain committed to compliance with all regulatory and legislative requirements applicable to our organization and operations. To fulfil this commitment, we are making significant investments to enhance our compliance capabilities from a system and human capital perspective. We also have regular engagements with our regulatory bodies to ensure full compliance with all requirements.

Our staff are our biggest asset to deliver on the hopes and aspirations of the people we serve. We have a compliant Board of Directors, and Executive Team with relevant requisite banking skills with a combined experience of over 150 years!

The above highlights the role we believe that a bank should play in being a catalyst for building an inclusive economy, creating wealth, and transforming people’s lives. This is a role Ithala has played over two decades, and it is the role we will continue to play to transform people’s lives.

Dr Thulani Vilakazi is a Chief Executive Officer of Ithala SOC Limited

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