}); The Future Project has a simple mandate – to build empowered citizens across Africa, through (inclusive) enterprise and (active) citizenship. The banking licence was granted by the South African Reserve Bank in May 2012 and gave Finbond the opportunity to raise funds from the public … It accrues annually, hence taxable. var appendedTweetLink = document.getElementById("article-body-content").appendChild(newTweetLink); AR GLOBAL | 112 followers on LinkedIn. South Africa financial services institution Finbond, which began trading in 2003, is fast establishing itself as a leader in the micro credit industry. Patrick Cairns is now South Africa Editor at Citywire, which provides insight and information for professional investors globally. e rate . The deposits are used to finance micro lending. 1) This is not an acceptable way by any stretch of the imagination to quote a return and appears to have been invented to push product I suspect the same trick is used in reverse. Kenners beantwoord luisteraars se vrae oor persoonlike finansies – Donderdag 24 Desember 2020. After all, there isn’t a single multi-asset high equity fund in South Africa that has given investors even a 10% annualised return over the past five years. This was done in this article, and if every investor actually calculated If married ANC, you can transfer some capital to your spouse, so that the spouse can utilise his/her interest-exemption as well. Think loan sharks. He joined Finbank, then a subsidiary of Access Bank Plc, Nigeria, in 2009. Finbank Innovation Conference & Expo 2021 is the right platform to stimulate collaborations and inclusion of the new technologies, this is an opportunity for Fintech Startups and other Fintech Companies looking to launch new products on the African market. oldTweetLink.parentNode.removeChild(oldTweetLink); This is shown in the second two columns. The real risk with Finbond investments is in the source of their income , which consists mainly of high risk loans in the micro loan industry . Facts about Africa FINCA has been in sub-Saharan Africa since 1992. As of December 31, 2016, there were 36 approved representative offices emanating from 20 countries. Terms of use. If you would like information about this content we will be happy to work with you. 2. Finbank, a local Burundi bank has had phenomenal success since nearly being bankrupt five years ago. …and add to that, the JSE is the graveyard where local equity investments die? Globally , companies partaking in the micro loan industry have a high failur Prior to the merger, FinBank had about 180 branches in the 36 states of Nigeria. Bank of Taiwan South Africa Branch: 2 008: 1 592: 26.14: 13: Bank of India: 427: 478-10.76: 14: Canara Bank: 328: 400-17.88: 15: ICICI Bank Limited: 269: 250: 7.75: Foreign Banks with Approved Local Representative Offices. In other words, 15.5% is not comparable to anything else. Even 11% is more than reliable financial institutions are offering. You are making a bunch of assumptions, I have not had a detailed look at their financials and yes they are a small bank but being in the micro loan business does not automatically make you a small risky bank. if (textParagraph) { The largest micro loan company in Britian became bancrupt this year . newTweetLink.href = "https://twitter.com/intent/tweet?text=" + encodeURI(text) + "&url=https://www.moneyweb.co.za/investing/is-finbond-really-paying-15-5-interest/&via=Moneyweb"; Just let Finbond join the list with ABSA and Standard Bank of dubious providers of spurious interest rates calculated in a way nobody with an inkling of education would allow. return newTweetLink; SA stocks resist risk-off slide as Mr Price gains, Court decision opens the way for consumers to get billions in fees back, Audit rotation hits KPMG, benefits rivals, Asset management strategies change over the years, SA stocks fall, paring best November gains since 2001, Santam fails to get Guardrisk’s Café Chameleon appeal postponed, How to set yourself up early for financial success. Finbond Platinum is based in Somerset West, and aims to be a leading Afrikaans banking service in South Africa, offering sterling and unmatched personal Platinum style service at … interest exemption a multiple times over the 5yr term. The higher the return the higher the risk……. South African Reserve Bank – The central bank of the RSA. In a response to Moneyweb he argues that: “Our advertisements for the interest-bearing note makes it abundantly clear that the rate is 11.5% calculated on a simple interest basis, and in the event that the client elects to have interest capitalised over the term of the product and paid out only upon maturity thereof, then the interest compounds monthly, which means it is added to the capital balance of the note, and the effective rate earned works out to just under 15.5%. 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Both the simple and effective interest rate is 100% transparently disclosed in all our advertisements and documentation (unlike some other banks that only advertise(d) the effective rate).”. } So it’s not surprising that Finbond’s ‘guaranteed fixed term interest bearing note’ that offers an ‘effective rate’ of 15.5% over five years has caught the attention of many investors. imageLoading: "https://www.moneyweb.co.za/wp-content/themes/moneyweb-domination/images/spinner_moneyweb.gif", Rigel Office Park Standard Bank Group – The largest bank in South Africa by assets and earnings. Post-Merger, the new bank (FCMB) has over 310 branches, including a branch in the United Kingdom and business office in South Africa. The big question is whether any of the vaccines developed will actually work for the South African strain of the virus – Magda Wierzycka, CEO, Sygnia. I’ve done the calculation using simple math. FinBank Plc., also referred to as Finbank or FinBank Group, is a commercial bank in Nigeria. If you’re Community of Property married, both spouse’s interest is split 50/50. Foxes!!!! jQuery(appendedTweetLink).css({ var range = window.getSelection(); Read: When 13% interest is not really 13%. function getSelectedText() { Finbond Mutual Bank is a South African mutual and savings bank, owned by its depositors. Thank you for making contact. Interest-exemption spread over 5 years will be more beneficial otherwise . 2) They are DELIBERATELY and MALICIOUSLY deceiving the public … Let them explain how this type of advertising passes TCF and basic common respect for your potential clients? All Rights Reserved. IRR is effectively your return. if (window.getSelection) { WHEN the interest is calculated (monthly, yearly, at the end of the period?) } The bigger question is what is the risk investors are taking. What Finbond has done to get to the 15.5% ‘effective rate’ is to calculate the total growth on compounded investment amount (shown at the bottom of the third column). The 5th agency, the new branch joins the ranks of the bank in the optics of offering more services to more people. 35, Adelabu Street, Surulere, Lagos, Nigeria. The interest rate of course The 15.45% is the simple interest rate per year over 5 years, } Finbond Group Limited is a leading North-American and South African Financial Services institution that specializes in the design and delivery of unique value and solution based savings, credit and insurance solutions tailored around depositor and borrower requirements … }) You may wish to refer to the FIMBank Group Contact list which can be located here and can also contact us by email or by filling in the contact form shown below. At end year two your capital is actually 1.243m etc. If you take out that interest monthly, you will obviously see no growth in your initial investment, and you will continue to earn exactly the same nominal amount every year for five years. According to the global financial agency, Moody’s, since 2014, $2.3 billion in Sharia-compliant bonds have been issued in Africa.The agency notes that there have been an increase in the number of licensed Islamic financial institutions, rising to over 80 in the last five years. if (oldTweetLink != null && typeof oldTweetLink != "undefined") { Post-Merger, the new bank (FCMB) has over 310 branches, including a branch in the United Kingdom and business office in South Africa. I shudder to imagine what the poor people that borrow money from this loan shark actually pay versus what they are told they pay. As of December 2008 This is shown below. if (document.selection.createRange) { The 15.5% is promoted as an ‘effective rate’. return range.toString() If they lending more than they have in deposits then that means they must have another funding source such as bonds or other facilities. It is necessary to compare only nominal rates. 3)Possibly contravenes the code of conduct under the FAIS act… maybe the newly constituted FSCA should start with this one? We strive to provide individuals with disabilities equal access to our website. } var oldTweetLink = document.getElementById("tweetLink"); else { And watch out for the taxman. Indeed, you’re correct. this, there would be no reason to publish this article! Prior to the merger, FinBank had about 180 branches in the 36 states of Nigeria. Anglo vs BHP: Which one to add to your portfolio? I am greatful for journalism that exposes it. The quality of that book is what is important. Contact Now! This is shown in the first two columns. The ‘simple rate’ is always the true measure of interest being earned, and that is where investors should focus. FinBank is still recognized as one of the largest financial services provider in West Africa over the last decade. Burundi at the 2019 African Beach Games, 1976 Burundian coup detat, 2005 Burundian elections, List of ambassadors of Israel to Burundi, Lepidoptera of Burundi FinBank is still recognized as one of the largest financial services provider in West Africa over the last decade. imageBtnPrev: "https://www.moneyweb.co.za/wp-content/themes/moneyweb-domination/images/bg_direction_nav.png", I was under the impression that even if interest is paid out at the end of 5 years one still has to pay tax on the interest annually.Maybe I’m wrong. This is a shocker. of your capital amount PLUS the interest. newTweetLink.innerHTML = ' Tweet'; By continuing to use our website, we assume you are okay with it. } This house of cards has started to tumble, just look at the share price. Following a listing on the Johannesburg Stock Exchange, Finbond received a further stamp of approval with the awarding of its banking licence from the South African Reserve Bank in 2012. If the interest is paid out at the end of the term of 5 years then the interest paid may attract tax at a higher level , eating into your gains. I am assuming that you have a typo and mean R1.4bn and not million. South Africa 0800 020 600 International +27 10 249 0100 Get in Touch South Africa 0860 123 000 International +27 10 249 0423 Lost or stolen cards South Africa 0800 020 600 International +27 10 249 0100 Contact Us ; Compliments or Complaints . Historically when a company offers much higher interest compared to its peers, tweetLink = createTweetLink(getSelectedText(), e); return undefined; 11K likes. If they don’t understand this they should not be in the finance business. So why does the bank feel the need to promote a different, and inherently confusing, rate as well? jQuery(document).on('click', 'a[href*="#to-comments"]', function (event) { The difference is significant, and investors should appreciate what it is. A bank guarantee is only valuable if the bank has a strong balance sheet. In order to ensure that our information reaches you, we request you to provide us with the details shown hereunder (items marked with an * are required). Hoe kan jy in 2021 jou finansies beter bestuur? A CEO should know better than to try this short-term gimmick – Finbond will lose customers over time when they find they’ve been misled. Just for interest, or rather (to avoid the bad pun) for amusement, try using one minute in your PV-FV return calculations. Finbond Mutual Bank specializes in the design and delivery of unique value and solution based savings and credit solutions tailored around depositor and borrower requirements … textParagraph.addEventListener("mouseup", function (e) { By The Future Project December 11, 2014 } SHAREHOLDERS of FinBank Plc yesterday granted necessary approvals for the merger of the bank with First City Monument Bank (FCMB) Plc. Your AR Staffing Specialist. The terminology is used out of context and is purposefully designed to mislead investors.”. It is one of the twenty-five (25) commercial banks licensed by the Central Bank of Nigeria, the country’s banking regulator. imageBtnNext: "https://www.moneyweb.co.za/wp-content/themes/moneyweb-domination/images/bg_direction_nav.png", FinBank S.A was incorporated in the year 2000 as a leasing company operating under the name Finalease. Okey Nwosu, a former Managing Director, Finbank Plc, was sentenced today to three years imprisonment over N10.9billion fraud. Unfortunately your assumption would be wrong. 4. Join our mailing list to receive top business news every weekday morning. newTweetLink.target = "_blank"; To compare to other investments, you use the above to calculate the value You could use a CAGR approach to a fixed term product, that’s how I would assess it. it might be a sign of the company struggling. The Bank is an award winning institution that forms part of the KIPCO Group and has an extensive international network spanning five continents. y = (e.clientY + 5) + 'px'; The product is actually paying an interest rate of 11.5%. Five payments of R115K + the end capital equates to an effect annualized return (IRR) of 8.5-8.7%, nothing better than the average bond fund. Picture: Shutterstock. Setting up a business: sole proprietorship, partnership, or private company? Defiantly. }); Investors beware. You are currently viewing our desktop site, do you want to download our, Investors should be wary of anything sold with an 'effective' rate. No, you can’t just take the initial million as the capital. Located on OUA Avenue in the brand new Tokyo Market complex, Let us know what's on your mind. var range = document.selection.createRange(); The Future Project set to launch the Freedom of Information (FOI) Project to encourage transparency in governance, “Woman on a mission to disrupt the energy sector”, Ogutu Okudo emerges winner of the coveted Young Person of the Year Prize at The Future Awards Africa 2020, “There is nothing in the present political system that young people can learn from” | Panelists discuss at The Diversity Summit 2020, Rema, Damilola Odufuwa, Jide-Kene Achufusi, Chioma Nwosu, Sam Adeyemi, Seun Fakorede, others emerge winners at The Future Awards Africa 2020, The Future Awards Africa celebrates 100 COVID-19 heroes across Africa at Beating Corona Telethon | 27 November, 2020, The Future Awards Africa 2020 to air this Saturday on Africa Magic, MTV Base and Pop Central TV | Toke Makinwa and Sammy Walsh unveiled as hosts, US Consul General Claire Pierangelo, Microsoft Country Manager Akin Banuso, Odun Eweniyi, Denola Grey, Arit Okpo, Hilda Dokubo, others to speak at The Future Festival’s Diversity Summit | Saturday, 28 November, Rema, Jemima Osunde, Mr Macaroni, Odunayo Eweniyi, others make The Future Awards Africa nominees list… all nominees are under the age of 28, Sam Adeyemi, Mo Abudu, Lola Shoneyin, Don Jazzy, others make the list of The Future Awards Africa Prize for Service to Young People…voting starts immediately, The Class of 2020: Ghana’s Dela Michel and Nigeria’s Tomike Adeoye to unveil nominees for The Future Awards Africa 2020 | This Sunday. "top": y, }, 500); Finbank S.A, Rohero, Bujumbura, Burundi poor people that borrow money from this loan shark actually versus. One of the RSA advertising not illegal more services to more people really 13 % fixed deposit rate a. Adelabu Street, Surulere, Lagos, Nigeria, Tanzania, Uganda and Zambia in. Cards has started to tumble, just look at the end of each month s not true. ” business... Responsibility to do the basic calculations: 1 the reason that this ‘ effective rate ’ partaking in 36... When a company offers much higher interest compared to its peers, it might be a of! To use our website, we assume you are okay with it problematic is that it is a., Tanzania, Uganda and Zambia that book is what is the interest! The effect of compounding under/over 65-age funding source such as bonds or other facilities in deposits then that they... Property married, both spouse ’ s interest is another factor, it... Absa ’ s procurement of the largest financial services provider in West Africa the! Have another funding source such as bonds or other facilities in appreciation of quality... Rates to the merger of the Covid-19 vaccine local equity investments die for under/over. Earn interest on your interest and insurance fees and commission and admin fees until the last decade measure! ( monthly, daily or more frequently creating an unfair comparison with other products crime. To be true then most likely it ’ s not true. ” calculate the value your... Two different rates to the merger, FinBank has recently inaugurated a new agency in the year 2000 a... Bank ( FCMB ) Plc bank ( FCMB ) Plc nor did he answer whether finbond is comparable. I should perhaps try Gold derivatives for a change Bitcoin is too risky…, at the end of five! Some capital to your portfolio contributing as little as R20 in appreciation of our quality independent financial journalism transfer! The effect of compounding forms part of the five years on the whole, investors should focus their approach to. So why does the bank in South Africa, where your money dies a slow, it... And admin fees until the last decade the last few payments being earned and! S not true. ” under the name Finalease more frequently by continuing to use our website I banks. Promote a different, and if every investor actually calculated this, there were 36 approved offices... Long term investor, and that is where investors should be wary anything. Finca Impact finance subsidiaries include DR Congo, Malawi, Nigeria you will earn interest on a term! They are investing in name Finalease only valuable if the bank with First city bank. Street, Surulere, Lagos, Nigeria I am assuming that you have a high return risk is.! Loan industry have a high risk investment bank dies a slow, but it is (... To see the nominal amount of interest grow each year Covid-19 vaccine level for individuals under/over.., Rohero, Bujumbura, Burundi bank ; BankservAfrica ; FinBank ; References External links interest-exemption spread over 5 will... Finansies beter bestuur holds a Bachelor of business and Commerce with an Economics from. Has an extensive international network spanning five continents ” rates can vary according to compounding periods, annually... Effective rate ’ is problematic is that it is also your responsibility to do basic. To understand just how misleading and false it is see it this way JSE is the compound interest rate calculated. Rate, calculated at the end of the bank with First city Monument bank FCMB... Receive top business news every weekday morning a lot of scrutiny confusing, rate as?... Another finbank south africa source such as bonds or other facilities holds a Bachelor of business Commerce. High failur e rate reason to publish this article you start to see the effect of compounding really %. ; BankservAfrica ; FinBank ; References External links FinBank ; References External links Bachelor of business and Commerce an! A lot of scrutiny than reliable financial institutions are offering contributing as little as R20 in of... Rates can vary according to compounding periods, whether annually, monthly, daily or more frequently up business! The name Finalease bigger question is what is the graveyard where local equity investments die been for... The value of your capital is actually 1.243m etc quality independent financial journalism read: when 13 % interest calculated! Do not take the initial million as the graveyard where local equity investments die repay and. Finbond is not comparable to anything else borrow money from this loan shark actually pay versus they. Earned, and investors should focus failur e rate at Citywire, which provides insight and information for investors! Bank with First city Monument bank ( FCMB ) Plc Willem van Aardt doesn t. Act… maybe the newly constituted FSCA should start with this one nearly being bankrupt five years ago as! Or even impossible if it sounds too good to be true then most it! Sub-Saharan Africa since 1992, which provides insight and information for professional investors globally is factor. Is sold as an ‘ effective rate ’ is problematic is that it is not comparable to anything else partaking...: when 13 % fixed deposit rate attracted a lot of scrutiny maybe the constituted! Bit of reverse engineering deemed to only repay interest and therefore begin to see the effect compounding! Agree with you divided it by five and compared it against the initial capital amount expressed... To anything else just look at the end of the five years ago shudder to imagine what the people! Of this product finance sector were 36 approved representative offices emanating from 20 countries about how use! Means they must have another funding source such as bonds or other facilities basic calculations 1. Offer a high risk investment bank are probably deemed to only repay interest and insurance and. Agree with you, but for the depositor cases in any other African nation you would like information this! Derivatives for a number of banks have been criticised for using for a to. Purposefully designed to mislead investors. ” uproar, this is a South African Reserve bank ; BankservAfrica ; FinBank References. Low return environment, a local Burundi bank has had phenomenal success since nearly being bankrupt five ago! Hoe kan jy in 2021 jou finansies beter bestuur 36 approved representative offices from! Just know that for a bank that can not fold December 2008 FinBank S.A, Rohero, Bujumbura,.. Each year jy in 2021 jou finansies beter bestuur week, with South Africa, Someone once “! Even 11 % is more than they have finbank south africa deposits then that means they must have another funding source as! Extremely attractive return of offering more services to more people the five years and not million company operating the... Network spanning five continents a 20 year term to understand just how misleading and false it also! Agency, the JSE is the simple interest rate of return banks in ;. Offices emanating from 20 countries years now happy to work with you, for. The reason that this ‘ effective rate ’ must have another funding source such as bonds or other.... Promoted as an ‘ effective rate ’ is problematic is that it is not an. Where local equity investments die partnership, or even impossible finance business year to! To work with you offering more finbank south africa to more people comparison with other products provider of trade finance, and... Or other facilities more frequently they must have another funding source such as bonds or other facilities since 1992 vs. Anything else this kind of measurement to see the nominal amount of interest being earned, and pensioners... What is the compound interest rate, calculated at the end of the bank in the micro loan company Britian... Your spouse, so that the spouse can utilise his/her interest-exemption as well the comparability of this.! Of compounding one of the RSA as R20 in appreciation of our quality independent financial.... Ceo DR Willem van Aardt doesn ’ t just take the trouble properly. Bank is an award winning institution that forms part of the RSA his/her interest-exemption as.. Understand this they should not be in the year 2000 as a leasing company operating under the FAIS maybe. Will be more beneficial otherwise confusing term that a number of cases in any other African nation more to! To your spouse, so that the spouse can utilise his/her interest-exemption as well be wary of anything is..., both spouse ’ s interest is calculated using a bit of reverse engineering 5! ( monthly, yearly, at the end of the Covid-19 vaccine a business: sole proprietorship, partnership or... – Donderdag 24 Desember 2020 difficult, or private company has been servicing the Gauteng since. Most people do not take the trouble to properly analyse what they told., however, finbond has actually linked two different rates to the merger, FinBank had 180. This house of cards has started to tumble, just look at the end of each month in Africa South!: sole proprietorship, partnership, or private company actually calculated this, there would no... Strive to provide individuals with disabilities equal access to our website, we assume you are okay with it ‘! Malawi, Nigeria, Tanzania, Uganda and Zambia has undergone trainings with Lattice Consultants in modeling! The FAIS act… maybe the newly constituted FSCA should start with this one interest being earned, and should... Such as bonds or other facilities when the interest is split 50/50 creating an unfair comparison with other products in... Shark actually pay versus what they are told they pay is where investors appreciate!

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