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Absa partners with trade union NUMSA

Author: Phakamisa Ndzamela

01 August 2011 15:33

NUMSA members to get banking facilities at workplace.

JOHANNESBURG – Absa (JSE:ASA) has signed a five year banking partnership with the National Union of Metalworkers of South Africa (NUMSA) in a deal that will help the bank grow its loan books by millions of rand.

Through the alliance NUMSA members will also be provided with banking solutions at the workplace environment as metalworkers often find it difficult to enter traditional banking halls during working hours. This means that NUMSA members in the factory floor will be able to open accounts, make deposits and on the other hand gain access to a range of offerings like mortgage finance, vehicle and asset finance and financial education.

NUMSA Investment Company (NIC) will also benefit from a fully customised banking gateway, giving the bank access to millions of rand in deposits and an opportunity to penetrate a market of over 260 000 NUMSA members. However, the parties have not disclosed the precise value of the deposits that will be flowing to Absa.

"My expectations are very high not only on the deposit side. We also want to look at a full-inclusive banking offering which can support the wealth management and wealth creation of people who are NUMSA members. I think what is very important to note is that we have a large population that needs financial literacy as well so it’s very important that we drive the education move as well,” chief executive of Absa Retail Gavin Opperman said.

“My heart goes out to the homeless people and we want take up more of that responsibility, ensuring that we put people in their houses, that we look beyond a basic banking product but also looking at products that also support the life and stage of the customer.”

Opperman was responding to a call by NUMSA General Secretary Irvin Jim, who made a plea that Absa must come to the rescue of workers who remain trapped in apartheid settlements without proper housing and access to finance at reasonable rates. Jim said there was a serious need to house a worker in conditions that will help them become more competitive and productive.

He said workers were caught in a situation where they were over qualified for RDP houses (government housing), but under qualified to get mortgage finance from a bank. He said this presented Absa with an opportunity to cater for such people.

Jim also noted that the NUMSA relationship with Absa was not only about giving loans to workers, but also helping them realise the goal of saving and understanding how to budget. He said a lot of workers were under banked and there was a huge challenge to cater for the working class.

NUMSA Investment Company CEO Khandani Msibi said it hoped that the relationship would provide a framework that will help deal with a problem of workers who were highly indebted because of excessive interest costs.

NUMSA Investment Company (NIC) is NUMSA’s investment wing. Among its investments NIC counts funeral business Doves and Union Life. Msibi said one of NIC’s entities had turnover of over R400m annually and all its subsidiaries would now bank with Absa. Through Doves, Absa had an opportunity to provide millions of rand in finance for the Doves fleet.

The benefit for Absa lies in using this relationship to get access in areas it never had, Msibi said.