Action Learning Project - The BankSETA行动学习项目u2014u2014BankSETA.pdf

2012 Action Learning Project UNSECURED LENDING What Is The Future Of Unsecured Lending For The South African Financial Services? SYNDICATE GROUP IV Joseph Masekomeng 082 325 8540 / josephma@absa.co.za Israel Skosana 082 967 6958 / Israel.skosana@ Otto Seleka 083 326 0117 / Ottos@nedbank.co.za Anesa Dindar 083 302 4118 / ADindar@wesbank.co.za Thembeka Maseko 083 768 8917 / TMaseko@wesbank.co.za Toyin Oladiran 082 468 8775 / toyin.oladiran@ ALP Coach: Conrad Viedge BANKSETA INTERNATIONAL EXECUTIVE DEVELOPMENT PROGRAMME 1 (RETAIL BANKING) 18/10/2012 EXECUTIVE SUMMARY Unsecured lending portfolio has grown at an average annual rate of 25% since 2005, from R34 billion in 2005 to R126 billion at the end of 2011. It now accounts for 8% of total retail credit book compared to 4% in 2005. Unsecured lending, specifically personal loans were mostly marketed to the low income earners in the 1990s. The profile of customers taking up personal loans has changed over time. Various commentators and government representatives recently expressed concern about the rapid growth of this portfolio over the last few years. Informed by local and global research, this Action Learning Project identified the driving factors behind the rapid growth in unsecured lending, outlined the risks and opportunities going forward; provided a future outlook on the subject matter and recommendations for the banking sector. Our research highlights key drivers of unsecured lending from a demand and supply perspective. Key demand side drivers i