JOHANNESBURG - The amended financial services sector code published in the government gazette on Friday is now a legally binding document on all players in the financial sector.
Trade and Industry Minister Rob Davies said the code made provision for no less than R122bn to be spent by the financial sector on empowerment financing.
However‚ the minister said the newly gazetted code would have to be reviewed again to take into account the recommendations of the report on the transformation of the financial sector. The report was compiled by Parliament's finance and trade and industry committees following their public hearings on the issue.
There were also other considerations that needed to be taken into account in the review‚ said Davis in a media statement on Monday.
He said it was of vital importance to transform the sector‚ which managed more than R8-trillion worth of assets and contributed 21.6% to GDP annually.
The amended financial sector code had unique features and deviations aimed at addressing the peculiarities of transformation in the sector. This included elements the minister said would act as a catalyst for empowerment‚ namely empowerment financing and access to financial services.
“The aim for empowerment financing is to ensure support for black-owned entities (including black industrialists)‚ black agriculture funding necessary to assist with the land reform process‚ transformational infrastructure financing and low cost housing funding."
Access to the financial services element in the code aimed to ensure that marginalised people (those in LSM 1-5) had access to transaction‚ sales and service points.
“Access to financial services includes aspects such as inclusive banking‚ access to affordable and understandable long-term insurance risk cover‚ and access to affordable and understandable short-term insurance risk cover.
Davis added: “The measurement of this element will be based on whether there is penetration of products‚ development of appropriate products‚ densification of service points‚ electronic access‚ and geographic access among the LSM 1-5 beneficiaries.”