Capitec Bank (South Africa) Implementing the Bottom of Pyramid Strategy

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Project Report
“ CAPITEC bank (South Africa) implementing the Bottom of Pyramid strategy

Submitted To:
Dr.Veena Dutta

Prepared By:
Fagun Naiyyer
PGDM 2011-13

Executive Summary

Little research has yet been undertaken in South Africa about commercial banks that are servicing the microenterprise and micro lending market. The objective of this project was to investigate the key factors that should be considered by capitec bank in South Africa servicing the microenterprise market. The focus for the study was on identifying the key factors and on investigating how the key factors were being considered. The part of the current study aimed to identify the key factors that required consideration, the focus was on Capitec bank
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MNC involvement in LDCs can be viable and fruitful only after these countries reach a certain threshold of economic development.

Banking at the Bottom of the Pyramid case of CAPITEC bank (South Africa)

Capitec is a subsidiary of PSG Financial Services, of which the ultimate holding company is the PSG Group Limited,
Capitec Bank was established in March 2001, and in 2003 shareholding Capitec Bank Limited is fully-owned by Capitec Bank Holdings, which also has a 75% stake in Key Distributors (a wholesale distributor of consumer goods) and consolidates Capitec Share Trust. The bank comprises around 95% of
Group assets.

The bottom of the economic pyramid presents a significant growth area for banks in emerging markets. Many attempts at cracking this opportunity have failed due to a lack of appreciation for the full breath of innovation that is required across the critical banking areas of product, distribution and process

Over 13 million people in South Africa are unbanked. Put differently, two out of every five South African adults have no access to formal financial services whatsoever. It is also widely recognised that it becomes very difficult for people to participate in the formal economy without some form of access to the formal banking system. Coupled with the fact that South Africa has one of the largest divides between rich and poor, the lack of access to banking poses significant social

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