Ithala is ripe and ready to become a state bank, says CEO Peter Ireland.
His belief is that for far too long, ordinary South Africans have been left out of the transformation agenda, with historically disadvantaged people, especially in rural areas, bearing the brunt of exclusion from financial services.
Calls for the creation of a state bank in line with government’s strategy to transform the financial sector, will empower communities and accelerate radical economic transformation.
Ithala SOC Limited – a 100% owned subsidiary of Ithala Development Finance Corporation, KwaZulu-Natal’s provincial development agency – has received overwhelming government support to achieve state bank status.
“As the pioneer in banking the unbanked sector, we believe we have all the right ingredients to become a state bank.
“We are well on our way to obtaining a full banking licence to realize our goal of becoming a fully-fledged bank, thus enabling growth of our national footprint beyond the borders of KZN.
“We pride ourselves in serving ordinary South Africans and helping them to manage their money and create wealth and is the essence of what we do as an organisation,” said Ireland.
He added that banking systems needed to be conducive to serving the interests of everyday South Africans – a role that Ithala has long been fulfilling as a development finance institution.
Ithala’s role as an entity wholly-owned by the KZN provincial government, requires its overall goals and strategies to be aligned with the socio-economic policies and strategies of government.
Hence, with a 58-year legacy of development, Ithala believes it is well positioned to ensure better use of public funds towards key priority areas including job creation and economic development in financially distressed rural communities.
As an organisation which puts people before profit, Ireland said a state bank would operate differently to commercial banks which invest millions of KZN taxpayer funds outside the province as opposed to investing in sustainable development locally first.
Against the backdrop of the triple challenges of poverty, inequality and unemployment, a state bank could earn additional revenue for the state which could help spur economic development and release vulnerable members of society from the debt trap that so many people find themselves in.
“Imagine financing student aid, infrastructure, and industry and community development through interest earned on tax revenue. Imagine keeping our resources local instead of exporting them as profits, never to be seen again. That is what a state bank could do,” said Ireland.
“All due processes are being adhered to by Ithala to enable completion of the process of applying for a permanent banking licence which we expect to be granted this year. Our turnaround strategy to ensure financial sustainability has paid dividends.
“The successful turnaround can be attributed to the strict implementation of sustainable cost control; promoting revenue growth through product innovation and expanded distribution channels; and introducing operational efficiencies through system development,” concluded Ireland.
The organisation affirms its ethos of customer-care and community partnership sustains the Ithala brand, thus differentiating this financial institution from its competitors.
A distribution network of 39 branches in KZN provide convenient transacting facilities. Ithala offers a comprehensive portfolio of corporate and personal banking solutions.