Updated: Apr 29
With recent pronouncements by government leaders on the need for a state bank, there is no need to look far for an existing bank that will make an ideal candidate.
Why reinvent the wheel when Ithala SOC Limited – a 100% owned subsidiary of Ithala Development Finance Corporation, KwaZulu-Natal’s provincial development agency – is ripe and ready to become a state bank?
With its good governance and sound infrastructure, Ithala which is a pioneer in banking the unbanked sector and helping them manage their money, has all the right ingredients to become a state bank, thus enabling growth of our national footprint beyond the borders of KZN.
President Cyril Ramaphosa, speaking to journalists as part of a SA National Editors Forum meeting in February 2021, expressed his support for a state bank. Also, in his State of the Nation Address in February 2020, President Ramaphosa announced that government was moving ahead with its plans to launch a state-owned bank “as part of our effort to extend access to financial services to all South Africans”.
The Premier of KZN Sihle Zikalala has long championed for Ithala to become a state bank in keeping with the ANC ‘s drive for radical economic transformation. 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.
The establishment of a state-owned bank with a developmental mandate will help end the economic apartheid that defines South Africa. It will transform the financial sector and will empower historically-disadvantaged communities and accelerate radical economic transformation.
As the only state-owned entity that provides full banking services, the concept of a state bank is a natural progressive step for Ithala. We tick all the boxes. Hence, there is no need to look beyond Ithala to appoint a state bank that is “fit and ready” to serve the people.
Ithala welcomes the tough stance taken by the ANC in KwaZulu-Natal to push for the fast-tracking of the establishment of a state bank. At its recent two-day lekgotla a fortnight ago, the ruling party in KwaZulu-Natal said the delays in setting up a state bank prejudiced the national democratic revolution.
The ruling party had long championed the case for a state bank and any further delays would see historically disadvantaged people being excluded from financial services. Banking systems must be conducive to serving the interests of everyday South Africans - a role that Ithala has long been fulfilling as a development finance institution. As an entity wholly-owned by the KZN provincial government, Ithala’s overall goals and strategies must be aligned with the socioeconomic policies and strategies of government.
Hence, with a six-decade 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, Ithala 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.
The millions of public funds ploughed into the so-called big banks have done little to free credit for job creation or economic development in depressed rural communities. Pouring money into the private banking system has only fixed the economy for bankers and the wealthy; it has not done much to address either the fundamental problem of unemployment or the debt trap so many South Africans find themselves in. Instead of using state funds as a means to further enrich private banks, a state-owned bank could earn additional revenue for the state while at the same time help spur economic development.
A state bank will provide financing for student aid, infrastructure, and industry and community development through interest earned on tax revenue. A state bank will help keep our resources local instead of exporting them as profits, never to be seen again.
Ithala’s mandate is to deliver and make banking services available where they are not readily available. Ithala’s offers unsecured lending, which means our loan is based on your credit worthiness. All due processes are being adhered to by Ithala to enable completion of the process of applying for a permanent banking licence. Our turnaround strategy to ensure financial sustainability has paid dividends.
The organisation affirms its ethos of customer-care and community partnership which sustain the Ithala brand, thus differentiating this financial institution from its competitors.
For many years, Ithala SOC Limited has run initiatives aimed at helping communities it serves.
Ithala Education Platform:
In response to the COVID-19 crisis and its impact on Grade 12 learners in KwaZulu-Natal, Ithala SOC Limited elected to direct its CSI energies towards an online education initiative.
Ithala is eager to help matric learners, particularly those from disadvantaged backgrounds, to recover lost schooling time as a result of the National Lockdown and to help them prepare for their exams. In the short-term, the programme has focussed on helping Grade 12 learners with CAPS Curriculum, soft skills, and career guidance. Podcasts of these webinars were uploaded to the Ithala Edu Platform to enable learners to receive 24-hour access to the webinars. These lessons were viewed on GoDigital_SAMovement or MyIthala on Facebook and covered on Ukhozi FM on Thursdays evenings between 21h00 – 22h00. Close to 120 000 grade 12 learners benefited from this programme.
Youth Digital Skills Development Programme:
In July 2019, Ithala Education Fund resolved to direct resources towards the development of digital skills through the 4IR Digital Skills Development programme. The objective is to provide learners with digital skills that will allow them to be active participants in the 4th Industrial Revolution (4IR) by exposing them to the world of coding, robotics, Artificial Intelligence, and Gaming.
The first programme was an intensive Winter/Summer School in December 2019 in KwaDlangezwa High School Esikhawini. A total of 44 learners from 11 schools attended where programming and coding skills were taught. On December 12, Ithala together with GoDigital held an online lesson that was screened live from Innovation hub venue in Durban. More than 10 speakers attended the live session, and more than 10 schools attended the online lesson on coding and robotics.
MyBest Childhood Foundation:
Ithala SOC Limited partnered with MyBest Childhood Foundation aimed at assisting previously disadvantaged learners in remote areas where schools are often overlooked and under resourced to encourage and nurture talent in early childhood.
The partnership consists of the following projects to be carried out by the My Best Childhood Foundation: School Feeding Scheme; Vegetable Garden Programme and School Signage.
As a member of the Banking Association of South Africa (BASA), Ithala SOC Limited is expected to conduct financial literacy education to the community. Ithala launched its financial education programme called Ithala MoneyTalks. This programme was established out of the need to start frank conversations about money, which is a difficult topic to discuss, especially in previously disadvantaged households.
Normalising these conversations opens opportunities to educate our customers and guides them on the path to financial prosperity. MoneyTalks offers our customers financial literacy skills which empower them to make sound financial decisions, manage their money, and create wealth. The programme contains a series of modules with practical advice and examples that are relevant to our customers. We have also introduced MoneyTalks lessons in various rural schools and other environments where we hope to impact future generations of Ithala customers.
Ithala believes that redefining what wealth means, educating, and giving South Africans the necessary tools to manage their money, can help address the triple challenges of poverty, unemployment, and inequality. By simplifying the conversation about wealth creation, we aim to offer our customers and potential customers a practical formula to accumulate wealth.
Ithala SOC Limited is the only state-owned entity that provides full banking and insurance services; is already fully regulated by the South African Reserve Bank and other banking industry regulators; and is fully committed to ensuring compliance with all applicable regulations.
A current distribution network of 38 branches in KZN provides convenient transacting facilities. Ithala offers a comprehensive portfolio of business banking, persona banking, and insurance solutions.
For more information visit
Tel: 031 366 2500.
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LinkedIn: Ithala SOC Limited