In the dynamic world of banking, Capitec has emerged as a beacon of innovation, not only catering to the masses but also attracting higher-income clients with a suite of compelling offerings.
With a strategic focus on providing value, purpose, and accessibility, Capitec’s rise in the higher-income segment is a testament to its commitment to inclusivity and customer-centric banking.
Capitec’s success in attracting higher-income clients is evident in its remarkable growth.
Clients with monthly inflows exceeding R15,000 into their Capitec accounts have surged by an impressive 17%.
the company says this growth can be attributed to a range of innovative offerings tailored to meet the needs of this discerning clientele.
Robust Offerings at Low Fees
One of Capitec’s key strategies has been to offer a range of financial products and services typically associated with premium accounts at traditional banks, all while maintaining low fees.
The bank’s credit card, banking app, digital payment solutions, purpose lending options, and competitive interest rates on fixed-term savings accounts have been instrumental in attracting higher-income clients.
The banking group says the Capitec Credit Card, for instance, stands out as a top choice for travelers among higher-income clients. With no currency conversion fees and travel insurance coverage of up to R5 million, it offers peace of mind and value. Additionally, clients earn 1% cashback on every Rand spent, adding a rewarding element to their transactions.
Capitec’s commitment to innovation is further highlighted by recent introductions such as license disk renewals on the Capitec App, which garnered substantial market share shortly after its launch.
Moreover, the introduction of International Payments to over 50 countries has simplified cross-border transactions with a transparent pricing structure, featuring a flat fee of just R175.
Diversification and Purpose Lending
The bank’s approach to retail credit has evolved significantly, moving beyond traditional term credit to offer access facilities, credit cards, and purpose lending solutions.
The company added that this diversification has proven successful, with net loan sales and disbursements reaching R48.5 billion in 2024. Notably, 62% of these disbursements now comprise Access Facilities and Credit Cards, signaling a strategic shift towards more flexible and purpose-driven credit options.
Capitec’s Credit Card has experienced substantial growth, capturing a 35% increase in market share. The number of high-income clients earning over R50,000 has also seen a remarkable 56% growth over two years. This growth is attributed to Capitec’s focus on developing new credit solutions tailored for specific purposes, such as vehicle loans and education loans. The bank has also improved affordability by recognizing multiple income sources, ensuring inclusivity and accessibility for a diverse range of clients.
A Transformed Credit Portfolio
CEO Gerrie Fourie emphasises the transformation of Capitec’s retail credit portfolio over the past two years, marked by 141 granting model changes in the past year alone. Stricter credit granting criteria and a focus on attracting lower-risk, higher-income clients have been pivotal in this transformation. Credit card disbursements have soared by an impressive 28% to R17.3 billion, driven by strategic initiatives aimed at building a higher-quality loan book.
In conclusion, Capitec’s success in attracting higher-income clients is a testament to its innovative spirit and customer-centric approach.
By offering a compelling suite of financial products and services at competitive fees, the bank has positioned itself as a formidable player in the banking landscape. As Capitec continues to evolve and expand its offerings, one thing remains clear: it is not just a bank; it is a partner in its clients’ financial journeys, empowering them with purpose-driven solutions and value-added benefits.
