Capitec in mid-income market drive

FROM rural areas to high-end shopping malls, Capitec Bank has grown a comprehensive client base across low- and middle-income earners.

Blue-collar workers, pensioners and a tech-savvy middle class of young professionals have been attracted to its services.

Capitec client numbers grew by about 1.3 million to 8.6 million in the financial year ending February 2017 – an average of 100 000 new clients per month.

Francois Viviers, Capitec’s marketing and corporate affairs executive, said this week the bank did not “discriminate” on income and gave all its clients in different income categories the same level of service.

“We grew our footprint first in the rural areas and moved from there to urban areas, and now to high-end shopping malls.

“The result is that the low-income market segment was the first adopter of Capitec Bank and therefore represents a large share of our client base,” he said.

The bank’s slant towards inclusivity has been a huge drawcard for the low-income segment.

Customers in this category earn less than R10 000 a month. Capitec has a 25% share of this market in the banking sector.

Those in the middle-income segment earn R10 000 to R30 000 a month, and Capitec customers account for 11% of this market, while among high-income earners – those earning R30 000-plus – Capitec’s market share is 2%.

Jaap Meijer, MD for research at Dubai-based Arqaam Capital, said a huge opportunity for the bank was in the middle-income segment.

It plans to double its market share by 2020 and is targeting a 30% market share of the middle-income market.

“It identified opportunities in the SME segment, particularly as employed people are lending onwards to other family businesses,” Meijer said.

Viviers said Capitec, despite its small market share of high-income earners, had managed to attract people who “do not find value in prestige banking solutions”. — TMG