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Data reveals credit providers’ reluctance to grant medium to high value Vehicle and Asset Finance loans

Economic factors that steered the country towards a near downgrade by international credit rating agencies have not only played a role in the weakening of the Rand, job losses and hikes in fuel and food prices, but have furthermore contributed to testing times in the credit sphere. The latest statistics released by one of South Africa’s leading credit bureaus, Compuscan, reveal the extent to which South Africa’s struggling economy has impacted credit-active consumers and thus the industry as a whole.

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Barclays Africa commits to progress on the African continent through growth strategy

  • Education and Skills – spend R1,4bn in education and skills development targeting the youth
  • Enterprise Development – enable access to affordable finance for SMEs by raising R1,3bn through corporate supply and distribution chains using innovative technology
  • Financial Inclusion – enable digital and non-digital access to underserved consumers through real banking and value-add products and services to promote wider convenient access to financial services.
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Create your personal foundation for financial well-being

The term ‘financial well-being’ has become something of a buzzword when speaking about managing one’s personal finances, but Alexander Forbes Financial Planning Consultant Mark Hawes believes the meaning and understanding of this term is often confused.

“There is a common misconception that financial well-being is the preserve of the super-wealthy and lottery winners. However, the focus is on the wrong word: financial, instead of well-being. This is because people tend to focus exclusively on the numbers, such as growth or interest rates, and forget that actual human beings are involved,” Hawes said.

“Our individual well-being has to do with our personal goals, values and preferences. We all want different things for ourselves and for our families. These characteristics, desires, values and goals are what make each of us unique.

Hawes also mentions that when developing a financial plan it is crucial to start by looking at the unique needs of the individual involved: “If we exclude our personal goals, needs, and values in the process, we will be setting ourselves up for failure.”

To have your money work for you, you need to take control

“Unfortunately there is no short-cut,” Hawes said. “You need to put in place the steps to actually achieve what you want as well as the outcomes. Most people are so busy getting through their day-to-day challenges and responsibilities that they give little thought to their long-term goals. Instead, they simply adopt the attitude of: I’ll deal with ‘that’ when I get there.”

Does this sound familiar? Knowing what your financial goals are is the first step on your financial well-being journey. If you have not yet identified these goals, then you need to make some time to do this. Start small – decide on no more than five major objectives for the next 12 months. Don’t decide on too many as this becomes unmanageable. Hawes suggests that you consider the following guideline when developing your financial plan:

Be specific as this will help you stay motivated to stick to your plan

  • Do you want to save for a family holiday at the end of the year? Be specific – decide whether you want to go to Umhlanga or to Cape Town.
  • Do you want to pay off all your short-term debt? Be specific – decide that you will start with your clothing account.
  • Do you want to buy a new car? Be specific – specify the make and model.
  • Do you want to pay your children’s annual school fees up front at the beginning of the year and enjoy a discount? Be specific – write down how much you’ll need to pay to enjoy the discount.

Put a timeline on each goal

Decide how long you want to give yourself to achieve your goal – for example within the next six months, over the next year, or over the next three years.

Keep it simple

Your financial adviser can help you find simple expert solutions tailored to your specific needs. You can then use the financial product and investment portfolio that will best support you in achieving your desired goal. 

Your goals may change as your life changes

Once you’ve created your financial plan, it’s important to review it at least once a year with the help of a qualified financial planning consultant. This will allow you the flexibility to adapt your plan according to your changing needs while maintaining realistically achievable long-term financial goals.

Hawes says, “You should regularly review your goals, investment objectives and priorities. As we move through life our priorities change. Some objectives, such as saving enough for retirement, are continuous lifelong goals. Others, such as school fees, are shorter-term objectives and will only be priorities for a specific amount of time before you focus on new financial goals. Goal setting is an important part of financial planning. Ultimately, deciding on your financial goals empowers you to make better financial decisions and to take control of your hard-earned money.”

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CBN Finance Directory now online!

The Cape Business News Finance Directory 2015 is now online!

To view the directory, click here.


The Cape’s financial landscape

Cape Town is often viewed as the hub of money management – an image obviously enhanced by the fact that two of the country’s most iconic savings institutions, Sanlam and Old Mutual, have deep roots in the city. Then there’s also the fact that Stellenbosch-based investment giants like Remgro (which nurtured international tobacco and luxury goods brands) and PSG (which birthed the now highly successful Capitec Bank) have also pulled off inspired financial engineering over the decades.

Now that Cape Town plays host to the headquar­ters of so many large asset management firms (and small boutiques) – including Al­lan Gray, Coronation Fund Managers, Prescient and Cadiz – there is a strong sense that Cape Town remains a critical financial hub in the SA economy.

But Cape Town has endured a colourful history in the broader financial services arena over the last thirty years – partic­ularly the city’s specialist banking offering that has been whittled down through vigorous corpo­rate action. There were the rath­er painful events like the demise of Cape Investment Bank and the collapse of the Masterbond Group. But there was also a time in the mid-to-late nineties when Cape Town was a hive of financial services activity.

Readers may recall that Cape Town had its very own property funding dynamo in form of Cape of Good Hope Bank, which sadly was incorporated into its parent company Nedbank after a merger with another Cape Town financial services stalwart Board of Executors (BoE.) In fact BoE, at one stage, seemed to come very close to forming a new banking and insurance (bancassurance) constellation that would have challenged the financial stalwarts on the JSE.

The BoE story is worth revisiting. It’s a convoluted tale that had its genesis in a hostile takeover attempt by banking giant Absa of Paarl-based Boland Bank. Retail tycoon Christo Wiese, however, rode to Boland’s rescue, and soon em­barked on initiatives to move the little bank out of its rural mindset and into a more sophisticated service offering (which includ­ed the acquisition of Boland Financial Services, which later became Mettle.)

Wiese – all the time holding out hope for the launch of a low cost retail banking model under Pep – then shifted a new look Boland towards former building society NBS, leading to the Bo­land-NBS merger. Wiese then steered his newly merged entity to BoE – then headed by power­ful executive troika of Bill McAd­am, Phil Biden and Tom Board­man – clinching a merger in 1998.

BoE, unfortunately, over -extended itself (in­cluding being involved in the Century City development,) and the ensuing small banking crisis of 2000/2001 saw the banking group merged with Nedbank to form what is today known as Nedcor. Interestingly BoE’s Boardman was appointed CEO of Nedcor, and he played a key role in reversing the bank’s fortunes (while his other two compatriots McAdam and Biden later moved into asset management and corporate advisory services respectively.)

At the same time it was also fun and games in Stellenbosch, where Absa was again painted as the villain in its bid to gain control of PSG. Fortunate­ly for PSG there was a ‘white knight’ in form of Steinhoff International prime mov­er Markus Jooste. But Absa did walk off with PSG Investment Bank, and Jooste became a significant minority shareholder in PSG…and even­tually wangled a 20% stake in PSG for Steinhoff.

The events of the late nineties and early nough­ties probably did dampen enthusiasm for financial services ventures in the Western Cape. But the prime movers of that time certain­ly have not shied away from trying their luck again in financial services.

PSG was instrumental in the development and early funding of Capitec Bank – a venture that has carved out a lucrative niche in affordable banking at the expense of the large banks. PSG has also perfected its long-term plans to form a wealth management hub in form of PSG Konsult, which was listed on the JSE last year.

Wiese also appears to be tilting at niche financial services again. He holds exposure to secured lend­ing in the UK and specialist financial structuring via Tradehold, and is involved – via Brait – in micro-lend­ing specialist Southern View. Wiese has also lately become involved in ConvergeNet, a newly formed investment company, which rumours suggest could include a substantial financial services of­fering in the future.

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