Banking Sector Education and Training Authority (Bank SETA) on its 2013 Strategic Plan

Meeting report

Briefing by the Banking Sector Education and Training Authority (BANKSETA)
Mr Max Makhubalo, BANKSETA CEO, said the SETA’s primary strategic objectives were to enable skills development and to implement the National Skills Development Strategy in the banking and microfinance sector.  It would do this by researching sector skills, through benchmarking against international best practise, through effective education and training initiatives, by providing for a skilled workforce, by developing Small and Medium Enterprise (SME) participation, by enhancing and building the capacity of Further Education and Training (FET) colleges and higher education institutions and by creating a skills pool that would enable the sector to meet its transformation targets.

Budget projections would see revenue increase from R430.6m the previous year to R483.6m. The impact of the new grant legislation would be that income from discretionary levies would increase from R118.4m to R293m and that income from mandatory levies would decrease from R296m to R118.4m. Expenditure fell under five main categories. Unemployed youth development accounted for 34% of expenditure, SME support accounted for 13%, skills development for the employed accounted for 37%, research accounted for less than 1% and capacity building for public institutions and SME providers accounted for the remaining 19%.

It would be opening an office in Bloemfontein where it was the lead SETA. It would assist people in the microfinance industry get qualified and accountants who were unemployed would be given work supporting SME’s. In total R76m would be spent on new or additional projects.

Challenges being addressed related to BANKSETA’s presence with regard to geographical position because most of the stakeholders were not in the Free State, the perceived function and infrastructure of the career office and the matching operational requirements of the FET college infrastructure.

BANKSETA and the Cooperative Bank Development Agency had undertaken a benchmarking trip to Malawi and Kenya in 2012. It had programmes to address financial literacy, financial management and cooperative operations as well as providing bursaries for staff to complete certificates in cooperative financial institutions.

Discussion
The Chairperson said he had been at a UNISA function where UNISA said there was no contact with SETAs and he asked the BANKSETA to interact with UNISA to see what programmes could benefit from SETA funds.

Ms A Lotriet (DA) asked if they could expand on how they went about their maths and science assistance programme and what impact it had on the curricula of FET colleges.

A member of the Committee asked what their previous targets were as one did not learn much from the targets that were given in the presentation. Where was the maths and science programme operating apart from the pilot site in KwaZulu-Natal? He asked if the increase in mandatory grants meant that employers were not claiming and that therefore training was not occurring as this would defeat the purpose of the grants.

Mr C Moni (ANC) asked what the difference between internships and the skills programme was. How much had to be banked to earn R10m in interest? Could the various expenditures of 34%, 13% and 15% be clarified? Who else did adult education training? Could the SETA expand on Recognition of Prior Learning (RPL)?

Mr A Mpontshane (IFP) said the targets should reflect the extent or scope of the challenge being addressed. What constraints were there to the achievement of the challenges or were the numbers arbitrary.

Mr Martin Mahosi, Chairperson of the Council of BANKSETA, said the new council had picked up on the issue of targets, where there appeared to be a trend of always surpassing targets and had themselves questioned whether the targets were too low. The matter had been debated for two years and a consensus on the priority arrears and what should inform targets from a quantitative and geographic point of view had been reached. The was a general concentration of banks in the urban areas and questions had arisen on what the SETA was going to do about the rural areas and how was it going to do it, thus the decision to increase spending on research. The numbers were not a thumb suck but an attempt to improve on previous targets as well as taking into account the geographic spread and budget constraints.

The SETA would reach out to UNISA. It had done work with universities and was supporting the University of Venda get accreditation for courses.

RPL had started a few years earlier when the SETA undertook a tour to the Netherlands. Since then there had been more appreciation of RPL. The Netherlands government funded RPL programmes and a governmental task team was put in place chaired by the BANKSETA CEO.

Regarding UNISA, Mr Makubalo replied that the starting point for the SETA was working with historically disadvantaged universities where there was the greatest need for investment. It had been working with the School of Banking at UNISA for a number of years and it gave post-doctoral research grants in areas of interest to banking and UNISA had benefited.

Regarding how the maths project worked, he said they were assisting teachers to teach better in maths, accounting and English at black schools as it was a fact that most blacks took maths literacy which was not accepted for entrance into the B.Commerce programme. The Investec teacher training programme was working very well.

Regarding interaction with FET’s on the curriculum development, he said that FET’s had a bad name because teachers should have qualifications two levels above that which they taught. The SETA assisted lecturers with scholarships to improve their ability to teach. It was paying for research into Islamic Banking and making the research available to FET’s.

The percentages referred to the percentage expenditure of different programmes and totalled 100%.

Regarding mandatory grants, he said there had been a change from the Department. 1% of the payroll was paid to SARS, of which 20% went to a National Skills Authority, 20% was paid to SETAs, 50% of which went to companies which submitted works skills programmes. This percentage had been reduced to 20% to ensure that companies did professional development, internships and vocational and technical training. Under this system companies could claim back even more than the original 50% and it was intended to get companies to move away from doing short courses that did not lead to any qualification.

Banks were itself spending 4-5% of the payroll on training with some banks having training centres that rivalled universities, resulting in SA banks and banking to be regarded as amongst the best in the world because of the quality of the training.

Regarding the difference between internships and the skills, he said internships were programmes that ran for one year and placed matriculants in banks. 5000 had been placed and 70-80% was employed by the banks. BANKSETA paid a stipend and the banks had first right to employ them. Matriculants got the opportunity to gain work experience and received a certificate in banking at the end. There was also the graduate programme called Kuyasa, which did the same and was very popular.

Regarding RPL, he said that BANKSETA was the leading SETA when it came to RPL because the introduction of FAIS meant that people in rural areas that had worked at banks for many years and knew how to do the work were trapped without the proper qualifications. There was no formal mechanism to ensure that they got credit and recognition for the training the banks had given them and RPL formalised that process.

On the problems the SETA was trying to address, he said that the BANKSETA did a Sector Skills Plan at the beginning of every year and did research to fashion the SETA’s programme and identify which jobs banks were struggling to recruit in.

Regarding what was being done to assist FETs, he said they were assisting FETs throughout the country but that they were the lead SETA in the Free State.

Mr S Makhubele (ANC) asked what the absorption rate of the 5000 interns was and what the success rate of the RPL programme was. He asked if there were any challenges such as contradictory legislation. He asked for more clarity on the resource challenges facing ‘inclusive banking’. He said there were programmes for management development in a few provinces but was there a plan to offer it nationwide. Had a Service level Agreement (SLA) been signed between the Department and the SETA? Did BANKSETA partner with or were they considering partnering with the National Student Financial Aid Scheme of South Africa (NSFAS).  

Mr K Dikobo (AZAPO) confirmed that the BANKSETA RPL programme worked well but asked if they interacted with other SETAs so as to improve the other SETAs ability to implement RPL, as not a single teacher had been assisted via RPL. The relevant SETA continually claiming that they were still doing research. Nothing had been mentioned in the BANKSETA report about corporate governance. Was BANKSETA assisting schools and where were these maths programmes held? 

The Chairperson said that his office had been approached by people in the insurance sector who were facing unemployment because they had to undergo tests which would only be written in English and Afrikaans and were they to fail would result in them being disallowed to work in the sector. How was this matter being handled?  

Mr Makubalo said that the SETA had a tracking mechanism for the internships and reported on those numbers on an annual basis. 70-80% found employment with banks.

He said there were legislative challenges and the SETA wanted to work with FETs but they were not accredited by the Public Finance Management ACT (PFMA) nor were they on the PFMA database. FETs and universities routinely did not tender for work and the SETA was going out of its way to target FETs by insisting that the tenderer had to work with FETs.

The SETA was trying its best to be national but was constrained by the availability of banks and training space at banks. Banks did have an urban bias but Capitec and African Bank had assisted the SETA in rural areas into which they were expanding.

NSFAS had been given R3m. It had been in negotiations with them for this year’s amount as BANKSETA wanted to have an agreement with the student so that it could monitor the students’ subjects and ensure that it was related to banking.

It did not have the list of schools it assisted at hand but could provide it to the Committee. It did not deal directly with the schools. It trained teachers in giving career advice regarding the banking industry. Banking halls across the country had been transformed from white to black because of the success of the training.

It was difficult to start a bank in South Africa and there were no black owned banks in the country. Inclusive banking referred to the disbursers of loans such as Micro Finance Institutions and cooperative banks and these were the banks it was assisting.

Mr Mahosi said the SETA was forging a closer working relationship with the Cooperative Banking Development Agency to support their programme and deal with the shortcomings of the Mzansi bank account as this could be an alternative to that account.

There was a deeper need to understand what complexities there were in the sector and what could be done to facilitate the further transformation of the sector. Research was being done currently to map where cooperatives and microfinance institutions were and how this addressed population concentrations and what intervention programmes could be developed.

The Board had sent a request to the Department to allow the Board’s governance and strategy committee to merge with the executive committee so that Board and executive issues could be aligned.

The Board had commissioned a Board appraisal and it had received the report the previous month. It had held orientation training programmes for new members and in the next strategy plan would have increased detail on governance issues which would have been drawn from the commissioned report.

An official of the department of Higher Education and Training said that the Department had received SLAs from all SETAs and was processing them currently.

The Chairperson said the National Skills Fund had a framework and that SETAs should have a similar framework which would allow it to give grants without going the route of a tender. It could then issue an invitation to apply because an approved written objective framework was in place.

Mr Mahosi said it had appealed to the Committee two years ago about the abnormal increase of Treasury allocations to the BANKSETA. Only in the past month did it get a directive from Treasury that R143m would be withdrawn from BANKSETA because of improper allocations by Treasury.  He asked that greater focus and monitoring on these issues take place.

The meeting adjourned