1. Microfinance in the Banking Sector October 2011

2. Content Overview of microfinance in the banking sector Analysis of landscape Drivers of change Skills implications

3. Profile of microfinance Source: NCR Register, August 2010

4. Provincial distribution of credit activity Source: NCR Consumer Credit Market Report, December 2010

5. Estimated number of MFI employees % distribution staff Small enterprise financiers (mostly not for profit)3.8% Cooperatives1.0% Incremental/Low cost housing0.5% Small micro lenders37.3% Large micro lenders24.6% Alternative banks (African Bank/Capitec/U- Bank)31.6% Large/Commercial Banks1.2% Source: NCR Registration August 2010 with RUDO estimates

6. Employee race profile Source: Primary Research Interviews

7. Employee educational profile Source: Primary Research Interviews

8. Range of financial services TransactSaveBorrowProtect

9. The South African Microfinance Landscape

10. Drivers of change in the sector Economic and socio economic factors

11. Drivers of change in the sector Political and social environments –Speeding up growth and transformation to create decent work and sustainable livelihoods –Massive programme to build economic and social infrastructure –Comprehensive rural development strategy linked to land and agriculture reform and food security –Strengthen the skills and human resource base –Build cohesive, caring and sustainable communities (Address inequalities and halve poverty and unemployment by 2014)

12. Drivers of change in the sector Technological factors –Competitiveness through technology –National loan register no longer compulsory so no longer a source of accurate information –Cooperatives have mostly manual systems –Those who have purchased sophisticated custom designed software do not use it

13. Drivers of change in the sector Legislative environment

14. Skills implications A need for management talent –Loan officers promoted through the ranks lack management skills –Managers in commercial banks not familiar with business models for serving low-income markets –Paradigm shift – inclusive banking models that need managers with entrepreneurial spirit Credit Management, Legislation, Marketing and Compliance Cooperatives and ME lenders: Basic Accounting, Credit Management, Corporate governance skills

15. Questions?