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FirstRand CEO Focuses on Unsecured Loans as Companies Hoard Cash

FirstRand Ltd. Chief Executive Officer Sizwe Nxasana. Photographer: Simon Dawson/Bloomberg
FirstRand Ltd. Chief Executive Officer Sizwe Nxasana. Photographer: Simon Dawson/Bloomberg

Jan. 26 (Bloomberg) -- FirstRand Ltd. Chief Executive Officer Sizwe Nxasana said South Africa’s second-largest bank is focusing on unsecured loans to consumers as cash-hoarding companies have limited borrowing needs.

“South African loans are focused on unsecured lending,” Nxasana said in a Bloomberg Television interview at the World Economic Forum in Davos, Switzerland today. South African companies are sitting on “a lot of cash,” he said.

Local lenders including Standard Bank Group Ltd., Africa’s largest bank, and Barclays Plc’s Absa Group Ltd. are stepping up loans to South Africans without demanding collateral. The banks are aiming to capture more low-income customers as consumers are hurt by higher inflation and falling house prices.

Unsecured lending has “huge” growth potential, Riaan Stassen, CEO of Capitec Bank Holdings Ltd., which began business in 2001 specializing in loans for low-income earners, said in an interview yesterday.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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