Bankseta on Training in the Microfinancing Industry: briefing

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Employment and Labour

03 June 2003
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Meeting report

3 June 2003

Chairperson: Mr. S Manie

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BANKSETA Powerpoint presentation

BANKSETA website:

Representatives of the BANKSETA explained to the committee that the Sector Education and Training Authority (SETA) was a new one, which faced many challenges.  The microfinancing industry was a new one, which faced new challenges.  One of these challenges was in skills training.  The SETA had thus embarked on a training programme for this industry and was in the middle of the programme at present.  Members emphasised that that any kind of training should aim at the transformation of the industry.

The Chair explained that BANKSETA had approached the committee to make a presentation.  Human resource skills were important for the economy and the BANKSETA was a very important roleplayer.  They wanted to hear what the BANKSETA was doing and how they were helping in the process of transformation.  It was highlighted at the hearings on employment equity that any equity programmre had to be coupled with training.  They were also eager to hear what role the SETA was playing in the SMME sector.

Mr. F Groenewald, the CEO, of the BANKSETA, addressed the committee according to the Powerpoint presentation attached.  He added that at first, it was thought that there would be approximately 160 members in the SETA.  In reality, the membership was approximately 1700 as the microfinance sector was also included.  Traditional banks were well on their way as far transformation was concerned, the microfinance sector however still had some way to go.  Consolidation was taking place in the bank sector, and it was Mr. Groenewald’s opinion that transformation would be easier as this consolidation happened. 

The microfinance industry had a reputation and were known as “loan sharks”.  This sector was however trying to improve its image.  It had also emerged that not only one training product could be offered to the sector.  The SETA had also made it easy for the SMME sector to be involved and had cut down on unnecessary paperwork.  In the area of skills development, the SETA had examined the sector for guidance and had identified five areas in which training was needed.  These areas were leadership and management development, customer services and sales, financial skills, IT skills and compliance skills.  It was however difficult to get the small organisations to submit their workplace skills plans.  At present only 9% of the SMME sector was involved.

The SETA had contracted the University of the Western Cape to research whether e-learning was feasible for training.  Mr. Groenewald pointed out that the microfinancing industry had been started by white Afrikaans males and they continued to employ these as well.  Transformation was needed in this sector.  Where capacity building was concerned, it had emerged that the education being offered was of poor quality and 'upskilling' was being done.  In closing, Mr. Groenewald pointed out that the SETA was focused on research, but that that there was not many people doing research in the country.  He also said that it was his impression that the banking sector was serious about transformation. 

Ms. B Dlamini, marketing and Public Relation Manager of Kagiso communications, addressed the committee briefly and explained the SETA’s skills project in the microfinancing sector.  The details of the presentation is in the presentation attached.

The Chair asked, Ms. A Bird, the deputy Director-General, to comment.  She said that she would like to underline that the project done by the BANKSETA was funded by the NSF and was an excellent strategic one.  It was hoped that the project would grow.

Mr. Sithole (ANC) remarked that in his constituency, there had been a decline in industries.  The problem however was that there was a lack of training and knowledge.  Would the SETA be available to come to his constituency to hold workshops?  He added that there was a trend in the black community for graduates to go into economics and business management.  How could these people could access the products which the SETA  was offering?  It was important that the products reached the black community as the banking sector was generally a “white boys club” and transformation was needed here. 

Mr. Groenewald replied that he was available and would like to meet with the member. The banking sector employed fewer and fewer people annually.  The trend was to employ more highly skilled people.  The problem however was to find people at professional and management level.  This was because of the past.  The focus therefore was on learnership programs.  In this way, the banks were now able to stream graduates and matrics in the direction that was needed.  It had emerged that the perception in the public was that banks were not the preferred employer.  Learnerships was therefore needed.

Mr. Moropa (ANC) said that there was a huge backlog in the black community, in this sector and that it needed to be turned around.  It was a huge task to do this though.  Was the SETA  ready for this task?  He pointed out that whatever the SETA did, had to be linked to provide growth to the economy.  How did the project push back poverty?  It was also important that the SETA  understood policy imperatives and that programmes fitted in with this. 

Mr. Groenewald pointed out that the SETA was settled and could deliver.

Mr. Redcliffe (DA) remarked that the core business of the SETA  was training and wanted to know why they were involved with SMMEs and borrowers.  There was a high failure rate in the SMME sector.  Was the microfinance sector was any different?  What was the staff turnover in the banking sector?

The Chair asked what could be done to accelerate skills acquisition. Was SETA  engaging the private sector outside of the banking sector?  Was there any wisdom in taking borrowers on course as they were already in the system?.The programme should be more preventative and that interventions be done through constituencies.  The transformation agenda should be set by the SETA and that they should not depend on the banks for this.  The SETA should decide what was needed for the economy.

Ms. Matlanyane (ANC) asked if community banks were also involved in the SETA’s projects.

The Chair asked that the SETA respond in writing to the last three questions as there was not enough time.

The meeting was adjourned.


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