ABSA Bank has recently commenced on a new venture to target the microfinance sector due to the ever increasing need to supply banking services in remote areas and banking the unbanked population of South Africa.

Microfinance clients are normally classified as self-employed, low-income or poor individuals and up until now there insufficient banking products or solutions offered by banks such as ABSA to cater for these borrower’s needs.. The needs are more specific than lending and they involve accessibility to banks, specific microfinance loan products, different account types, small business owner needs and group lending facilities.

ABSA aims to infiltrate this sector by providing suitable banking products and accessible Microfinance Enterprise Service Centres (containers functioning as rural lending outlets) throughout the rural and remote areas of South Africa.

The Micro Enterprise Service Centres will offer the following:

• ICT services for micro enterprises: Fax, telephone, email, internet – provided by local entrepreneur
• Business Development Services Information and Access Point –partnership with external service providers
• Financial Services: Loan Applications, Account Opening, Enquiries, Referrals, later more services
• Community Bulletin Board
• Matchmaking Information – investigating how to outsource
• Location, high density micro enterprise areas
• No cash will be handled at the Service Centre
• All staff from the community will be well trained

Compuscan were chosen by ABSA to fit 200 Microfinance Enterprise Service Centres with the required hardware, software, communications infrastructure and through CSTI (Our Bankseta accredited training company) to develop appropriate training for the staff. Compuscan has assisted in the creation of the mobile lending centres so that ABSA are able to process loan applications in the heart of rural SA. The Compuscan solution helps ABSA lend with the right controls, according their defined credit policy, and still allows them to maintain NCA compliance which has been a key requirement for the Bank.

“ABSA Micro Enterprise Finance had to get into the market within a short period of time to test products.  After a thorough search we settled on ‘Proloan’ from Compuscan which we saw as a NCA compliant cost effective solution for our specific situation. We value the willingness from the management of Compuscan to go the extra mile”

As for the training of the loan officers/staff that will come from the surrounding communities, Compuscan’s subsidiary company, Credit Skills Training Institute (‘CSTI’) will be responsible for managing the training programmes at each Microfinance Enterprise Service Centre. The training programs will be facilitated on a continuous basis that will ensure that the centres will establish themselves as sustainable financial institutions.

The project’s first microfinance centre will be launched in July 2008 with all staff, infrastructure and technology in place.