One of the many frustrations of 2011 was
Capitec’s delay in discussing details of its branch investment
plans.
The fact that Capitec was planning to overhaul
its branch network – and ramp up its already energetic branch
expansion programme – was known as was its decision to commission
UK-based allen international to design its new retail store
concept.
Go deeper with GlobalData
Capitec agreed to set out its thinking for
what is a very ambitious project, even by its standards, but not
until the New Year.
The first such branch opened on 26 January
(see feature p.2) and early images are to hand.
At first glance, the Capitec project will
offer a blueprint to what can be achieved via the convenience
branch store concept.
It is easy to forget that Capitec was only
established in 2001.
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By GlobalDataIn ten short years, it has carved a niche in
the South African market based on unsecured lending, mainly to the
lower income sector of the market.
That has resulted in huge success in
attracting the unbanked and underbanked segments and now it is
winning market share from the Big Four retail banks.
In the six months to August 2011, Capitec’s
revenue from loans soared by around 50% to ZAR2.6bn.
Fees revenue rose even faster, by 54% to
ZAR361m.
Total lending went through the roof: up 86% to
over ZAR14bn, despite the high interest rate environment in South
Africa.
Looking ahead, Capitec will aim to lessen its
reliance on revenue from lending and will target a higher
percentage of its revenue from transactional income.
Specifically, it has said that it would be
aiming for non-loans revenue to account for around 40% of its
operational expenses by 2014, up from around 30% meantime.
In terms of product innovation, Capitec has
plans to launch into the credit card sector; it will also look to
grow fees revenue from a MasterCard-branded debit card.
But in the short term, it is Capitec’s branch
plans that will attract the greatest attention and deservedly
so.
