Good afternoon, ladies and gentlemen, and welcome to the second virtual Annual General Meeting of shareholders of Capitec Bank Holdings Limited. My name is Santie Botha, and I chair the boards of Capitec. With the COVID-19 pandemic still in force, we decided that in the interest of everybody's well-being and safety, to again convene a virtual meeting for this year. As a quorum of members is present, we have at least three shareholders present, and at least 25% of votes have been submitted on proxy, and notice of this meeting has been given in an appropriate manner, I declare this meeting properly constituted. The notice convening this meeting was distributed on 28th April 2021, allowing sufficient time for members to peruse the contents thereof. I propose therefore that the notice be taken as read.
This being a virtual meeting, we need to vote on a poll on all the resolutions proposed in the notice. We will open the voting on all the resolutions now to enable you to vote at your leisure while I read through the resolutions. Select "for" if you agree, select "against" if you do not agree, or select "abstain" if you do not wish to vote on a resolution. You will still be able to send messages and view the webcast while the poll is still open. I will allow for questions on all the resolutions after all the resolutions have been read. Once all your questions have been dealt with, we will ask you to finalize your votes, close the poll, and we will then display the results of all the resolutions on the screen.
If you wish to ask a question, select the messaging icon, type your message in the chat box at the bottom of the messaging screen, and then press send. Gerrie Fourie, the Group CEO of Capitec, will present an overview of Capitec's performance at the end of this AGM. The Companies Act requires a member of the Social and Ethics Committee to report on the affairs of this committee. This report is included in the Integrated Annual Report. Emma Mashile-Ntwane, chairman of this committee, can address any questions that you may have at the end of this meeting. We will offer a further opportunity for general questions after Gerrie's presentation at the end of the meeting. Ordinary Resolutions. We will now move to the business of the day. Ordinary Resolution number 1, the re-election of Danie Meintjes as an Independent Non-Exec Director of the company.
Danie was the CEO of the Mediclinic Group until his retirement in 2018 and currently serves on the Board of Mediclinic International. He joined the Board of Capitec in 2018 and is a valued member of the Board. Danie is present. Danie, please show yourself on screen.
Good afternoon, everybody. My name is Danie Meintjes. I'm available for re-election to serve on the Capitec Board. Thank you. Thanks, Chair.
Thank you, Danie. Please vote now if you have no questions regarding this resolution. Ordinary Resolution number 2, the re-election of Piet Mouton as a Non-Executive Director of the company. Piet is the CEO of PSG Group and serves on the boards of a number of companies. Piet joined the Board of Capitec in 2007 and is an experienced and valued member of our Board. Piet is present. Piet, please show yourself on screen.
Good afternoon, ladies and gentlemen, and shareholders. I hereby put myself up for re-election. Thank you very much.
Thank you, Piet. Please vote now if you have no questions regarding this resolution. Ordinary Resolution number 3, the re-election of Jean Pierre Verster as an independent Non-Exec Director of the company. Jean Pierre is a Chartered Accountant and the Chairman of our Audit Committee. He is well-positioned to serve the business with his analyst and audit experience. Jean Pierre joined the Capitec Board in 2015 and is a valued member of the board. We're on Ordinary Resolution number 3, Jean Pierre Verster. Jean Pierre is present. Jean Pierre, please present yourself on screen.
Thanks, Santie. Good afternoon, everyone. My name is Jean Pierre, and I'm available to serve on the Capitec Board.
Thank you, Jean Pierre. Please vote now if you have no questions on this resolution. Ordinary Resolution number 4, the confirmation of the appointment of Cora Fernandez as an Independent Non-Exec Director. Cora is a Chartered Accountant and has extensive experience in investment management and private equity. Cora joined the Capitec Board on the 21st of September 2020. Cora is present. Cora, please show yourself on screen.
Good afternoon, ladies and gentlemen. My name is Cora Fernandez, I'm available to sit on the Capitec Board. Thank you, Chair.
Thank you, Cora. Please vote now if you have no questions on this resolution. Ordinary Resolution number 5, the confirmation of the appointment of Stan du Plessis as an Independent Non-Executive Director. Stan is Chief Operating Officer and Professor of Economics at Stellenbosch University. He's a specialist in macroeconomics and monetary policy and has been an advisor to the South African Reserve Bank and National Treasury on macroeconomic policy. Stan joined the Capitec Board on the 21st of September 2020. Stan is present. Stan, please show yourself on screen.
Good afternoon, Chair, ladies and gentlemen. My name is Stan du Plessis, and I'm available to serve on the Capitec Board.
Thank you, Stan. Please vote now if you have no questions on this resolution. Ordinary Resolution number 6, the confirmation of the appointment of Vusi Mahlangu as an Independent Non-Executive Director. Vusi is the co-founder and director of Tamela, an investment and corporate finance business. He has extensive experience in finance and investment banking. Vusi joined the Capitec Board on the 21st of September 2020. Vusi is present.
Good afternoon, ladies and gentlemen. My name is Vusi Mahlangu, and I'm available to serve on the Board of Capitec.
Thank you, Vusi. Please vote now if you have no questions regarding this resolution. Ordinary Resolution number 7, the reappointment of PwC as Auditors of the company up to the next AGM in 2022. Please vote now if you have no questions regarding this resolution. Ordinary Resolution number 8, the reappointment of Deloitte & Touche as joint auditor until the next AGM in 2022. Please vote now if you have no questions regarding this resolution. Ordinary Resolution number 9, the authority to, one, issue Loss-Absorbing Capital Securities, and two, ordinary shares upon the occurrence of a trigger event in respect of the Loss-Absorbing Capital Securities. Please vote now if you have no further questions on this resolution. Ordinary Resolution number 10, the general authority to issue Ordinary Shares for cash. Please vote now if you have no questions.
Ordinary Resolutions 11 and 12, this is the non-binding endorsement of the Remuneration Policy and its implementation. The purpose of Ordinary Resolutions 11 and 12 is to test the view of shareholders of our Remuneration Policy and our implementation of the policy. Just as a brief recap, in March 2020, South Africa went into one of the hardest lockdowns outside of Southeast Asia. As the lockdown was extended, financial hardship to a large portion of our client base and huge internal operational challenges became a reality. Our leadership team and all employees worked tirelessly to safeguard and balance shareholder interests with the health and well-being of our clients and of our staff.
While the group financial performance was negatively impacted in the first half of the year, strong and decisive leadership and innovative and agile delivery from all our staff ensured that we exceeded market expectations in the second half financial performance. The Remco, within its mandate, had to apply their minds to ensure that pay was aligned to performance and that staff remained motivated. As such, the Remco aligned both short-term and long-term incentive to reward all staff in the group. The overall Remuneration Philosophy of Capitec remains unchanged and fit for purpose for the achievement of long-term strategic targets. We'll now move to Ordinary Resolution number 11, which is the non-binding endorsement of the Remuneration Policy. Please vote now if you have no questions pertaining to this resolution. Ordinary Resolution number 12 is the non-binding endorsement of the Implementation Report of our Remuneration Policy.
Once again, please vote if you have no further questions on this resolution. Ordinary Resolution number 13, authority to amend the definition of employee in the Capitec Bank Holdings Share Trust Deed. The purpose of the amendment is to be able to use the Share Incentive Scheme governed under the Trust as a tool to recruit senior managers to key roles in the group. Please vote now if you have no further questions on this resolution. That concludes the Ordinary Resolutions of the day. We now move to Special Resolutions. Special Resolution number 1 is the approval of the Non-Executive Directors' Fees for the financial year that ends on 28 February 2022. Please vote now if you have no questions on this Special Resolution.
Special Resolution 2, the general authority to the company and any of its subsidiaries to repurchase up to 5% of the Ordinary Shares issued by the company. Please vote now if you have no further questions. Special Resolution number 3, the authority to the Board to authorize the company to provide any financial assistance to any related or interrelated company. Please vote now if you have no questions pertaining to this particular resolution. Special Resolution number 4, the authority to the Board to authorize the company to provide financial assistance for the acquisition of Ordinary Shares in respect of a Restricted Share Plan for senior managers. Once again, please vote if you have no questions pertaining to Special Resolution number 4. We've now concluded on all the resolutions for this particular AGM.
If you have any specific questions on any of the resolutions, you can ask them now. Okay. There's a question from Andrew Bytheway. "I note the reports concerning COVID and the impact of the pandemic on clients. I would appreciate a comment on how the impact on employees has actually played out and how Capitec employment policies and procedures have been, and will continue to be, changed." Dr. Bytheway. Danie, can I ask you, Danie Meintjes, who's Chair of the Remco, to take this question?
Thanks, Chair. I will start, and I think then Gerrie can add to it from a remuneration point of view. I think as you summarized, Chair, we had to reevaluate during the year because the pandemic really caused havoc. There was uncertainty. We stopped all short-term bonuses, the calculations of that. We stopped increases. As you've noted in the Rem Report, we didn't give increases this year for the senior execs. As the year panned out and as we did a new budget that we approved at a Board level, we set new targets. I'm pleased to say that a normal increase was given to all staff. It varied. At the lower end of the spectrum, it was a higher increase. At the higher end of the employee group, it was lower, plus -minus inflation-related.
I'm very proud and very pleased to report that none of the employees was terminated. There were no layoffs, no salary freezes. The bank managed to maintain the business and look after the staff and the clients. I think that is a short summary. I don't know whether Gerrie would like to add anything.
Thank you, Danie. Gerrie, anything you wish to add?
No, I think the only thing to add is the fact that we had to adapt very quickly to work from home. As the year progressed, we're starting to move people back. I think the biggest challenge now is to get that balance right between work from home and work from office. I think that's a big opportunity. Another big thing is, we've driven very hardly multi-skilling and people using people in different jobs because this has given us a lot of opportunities in that regard.
Thank you. Any more questions? No further questions? Okay. If there are no further questions, we will close the poll and display the results of the votes on the screen. Are we ready for the results to be displayed on the screen?
The results will come up shortly, Chair.
Thank you. Just a minute or so. There you are. I'm just reviewing all the results. In terms of Ordinary Resolution number 1, for 96.31% passed. Ordinary Resolution number 2, 93.35% passed. Ordinary Resolution number 3, 98.35%, which is passed. Ordinary Resolution 4, 99.46% passed. five, 99.28% passed. six, 99.26% passed. seven, 79.82%, which is passed. eight, 98.39% passed. nine, 97.93%, which is passed. 10, 97.12%, which is passed. 11, 79.16%, which is passed. 12, 48.75%, which is not passed. 13, which is 99.44% passed. Special Resolution 1, 99.41% passed. two, 99.26% passed.
Three, 99.56% passed. four, 99.43% which is passed. Thank you very much. All the resolutions have been passed with the requisite majority vote, except for Ordinary Resolution number 12, which is the non-binding endorsement of the Implementation of the Remuneration Policy. As we have not received the requisite 75% on the non-binding endorsement of the Implementation of the Remuneration Policy, we will further engage with interested shareholders. We have already engaged with some shareholders prior to this AGM
We will communicate a proposed date for such engagements on SENS this coming Monday as part of the AGM results announcement. Ladies and gentlemen, as all the agenda items have now been dealt with, I would like to take this opportunity to thank you for attending this AGM today and also for your interest in Capitec. I now declare the AGM closed. Should you have any questions regarding the affairs of the Social and Ethics Committee, Emma Mashile-Ntwane is present to answer those. If there's no questions to Emma, then I'm going to hand over to Gerrie Fourie, our CEO, who will present an overview of Capitec. Gerrie, over to you. Thank you.
Thank you, Santie. Good afternoon, everyone. I think we normally, during my presentations, we make a video of either the future or the year that's passed. We thought it's better that given that Capitec is 20 years old, that we actually reflect on the 20 years and what's been achieved in the 20 years. It's interesting we normally get that question when we started with the bank, did we think we were going to be this big? I always said no. The answer lies and we've always kicked off on the fundamentals and focus on the implementation of our strategies, and that's still what we're doing today. What was also for me, very encouraging and quite an experience is when we had our celebrations here in March. There were still 49 people that actually joined me and André, who was with the bank for 20 years.
I would like to share that video with yourself.
[Presentation]
Two. Go. Okay. I think of the year that's gone past, I think these two words sum it up. That's a year that we had to be agile, and it's a year that we focused tremendously on digital. I just want to remind everyone that there's a presentation that I did about a month and a half ago for our year-end results, and that's got much more detail about the financials. I'm just going to cover certain aspects of the financials that I'm going to focus on. If I look at the year that's gone, it basically consists of two halves. I think we all know that March, the whole of COVID started, and then we had to quickly look at how do we make certain that our staff are safe, how our clients are safe, how do we start working from home.
I think the biggest challenge was to understand the full potential of COVID on the business, on our credit, on our provisioning. We also spent actually the first four, five months to rebudget and basically stop all new positions, stop salary increases. Danie referred to it. Second half was to actually really started to focus on growth. I think what we've done, I think it's a very good achievement. We've launched six new products in that period. I think what is important is right through COVID-19 and for the full year, we've maintained our service delivery right through. If I look at our financial results, I think what is important is that you can see the impact of the first half, and then the positive results in the second half.
I think what is important is, I remember when I said to our team here in August, September, if we actually can achieve the same figures as what we brought in 2020, we will have a very good year, and that was ZAR 3.3 billion. As you all know, we've actually increased that by 18%, also with a ROE of 30%. I think overall, we had a tremendous, very good year. We recovered well, I'll unpack that a little bit further. If I look at our key drivers, we've always said that we want to cover our operating expenses with our transactional income. That was the objective we set to ourselves about 10 years ago. I think what is quite nice is you can see in August and in February, we've actually achieved that with 101% and 102%.
Even if you bring Motilal in, you can see we're basically close to that. On the second side, you can see the combination between our credit income and our transactional income. We were as high in the first six months of 87%, 86%, and then dropped to 61%. Our aim was actually to get to ±50%. 30% of our income coming from credit and 50% of our income coming from transactional income. I think what it shows us is how well-diversified we are. We could go through a crisis, and that we're not that dependent on the credit side. I think, the challenge is, given the economy and given COVID, how do we open up on the credit side and how do we manage the credit side? I think that's a challenge for this year.
Cost to income, I think we're quite happy with ± 40%. In capital and equity, I think what helped us quite a lot in this period is we've always been very conservative. We've always said we need to make certain that we can go through experiences like a COVID-19. I think we've shown that. You can see how the capital and equity has improved to about 36%. The impact of buying Mercantile, you can see that impact coming through during 2019 and 2020. If I look at our retail credit sales, I think what is quite important is our sales dropped in the second half due to COVID. We pulled back. In the second half, we actually opened up. If you compare our sales, it was ZAR 39 million versus ZAR 39 million in the previous year.
If I look at the year ahead, I think we are on track to get back to about ZAR 39 million in sales. It all depends on what Q3 is going to do and what happens with the vaccines. We're quite positive about our credit sales in the sense of what we've achieved. I think the Access Facility has done exceptionally well, with about 50% of our sales now coming through from either Credit Card or from the Access Facility. What is interesting is on the Access Facility, about 50% of our sales in the Access Facility are sold to people that has previously got credit from us. Another 50% is to clients that never took credit with ourselves and now for the first time is taking up credit, as well as a new client. We're very happy with this product.
If I look at the impact of COVID. If I look at the impact of COVID, you can clearly see what it's done to our provisions. I think if you look at it, if you look and you see 2019, we had a ZAR 4.4 billion provision, then ZAR 4.5 billion again in 2020, then the ZAR 7.8 billion in 2021. I think what is important to note here is the dark blue, because in 2020, we provided ZAR 250 million. You can see in the first half, the ZAR 4.3 billion, then you can see we started releasing as we started to understand what is happening with COVID.
As we're standing now, we've got ZAR 3.2 billion that has been provided for COVID, and I think the next couple of months will tell us what's going to happen in that particular space. This is a very important slide. It just shows what has happened with digital. You can see our digital transactions has gone up from ZAR 560 million in 2019 to over ZAR 1 billion in 2020. We haven't increased our prices on digital for the last three years. It's a very simple sum. It's ZAR 1 per transaction. You can see the very strong growth. You could also see in the six months prior, there was no dip. If you look at the point-of-sale transactions, you could clearly see the dip in the first six months, the 419 versus the 584.
Again, there we have 1 billion transactions on our card transactions, and then cash basically staying pretty much flat. For us, that is very promising. We would like to get our clients, moving them away from cash to electronic payments. I think, this is a very positive slide for ourselves. If I look at our transactional income and how has it grown over the last couple of years, you can see the impact has grown steadily, and then last year, we managed to increase it with about ZAR 1 billion. That's driven by our digital, increase in our digital transactions of about ZAR 260 million, ZAR 270 million. There's also on our cash, we increased our prices on our cash because we wanted to move people away from cash with about ZAR 260 million, and then about ZAR 100 million due to Mercantile.
I think overall, we've done exceptionally well, and you can see the impact of our Funeral Plan. We've launched it in May 2019, and the contribution to our income was ZAR 54 million, then ZAR 113 million, and now it's ZAR 150 million. I think we've done exceptionally well on our transactional and our funeral income. I want to now spend time on the Bank for All South Africans. There's a perception in the market where people think that we're actually focusing on a certain segment of the market. When we wrote our business plan in 2000, we always said we want to bank 96%-97% of all South Africans. That was the aim, and I think we're starting to get to that aim. I would like to unpack that to show the inroads that we've made.
I think if we look at our number of clients, the number of clients, which you can see how it's grown, basically for the last two years, three years, we've grown with 2 million. That gives us a good 2 million per year. That gives us a very strong base. We're now over 60 million clients. The two numbers that we're driving very hard is the digital number, the 8.6 million clients that's on digital. That figure is now over 9 million. The quality clients, the quality banking clients, which is just over 4 million. The credit clients. I think the credit clients have stayed flat actually over the last couple of years at 1 million. That's, I think, a reflection of how we've actually moved out of the lower income segments where the big volumes were.
Secondly, our appetite, given the economy and given COVID, where we've pulled back. We're quite happy with that 1.1 million clients that has actually stuck in our credit with ourselves. I think otherwise, a very interesting stat is that the online retail transactions in 2020 grew of 66% for South Africa in totality to ZAR 30 billion. That's 4.2% of total retail volumes in Africa. Just to give you an indication, America and China was in 2019. I don't have their latest figures. America was at 15%, China was at 30%, was done online. There's still a lot of way for South Africa to grow in that particular area. That's why the digital space is so important. There's about 10 million people that is doing transactions on a digital or online platform. You can see what COVID has actually done to clothing and groceries.
I think this trend is there to stay, and I think it's going to grow quite a lot. This is, to me, a positive slide. It shows clearly that we are the market leader when it comes to digital. You can see that we've downloaded from 2019. We're the leader with 7 million people that's downloaded the Capitec app, and you can see the other banks, where they are. The slide on the right, the cell phone is actually one that we watch quite a lot. This is Apple's stats, and that was the stats of yesterday. They're showing if we competed with WhatsApp and TikTok, you can see we're number three, meaning we're the app that is the third most downloaded. That's varied. We vary between first place, second place, and third place the whole time.
You can see there's a big adoption on the app for ourselves, which is very encouraging. This is actually the interesting slide for me. What we've just done is we've unpacked the 15.7 million clients and unpacked it into age groups to see who is making use of Capitec. You can see on the left, people that's younger than 20. There's 22 million people in South Africa. A big portion of our population is below the age of 20. We've only got 1 million clients that is in that segment. If we look at 21- 40, there's 20 million people in South Africa. We've got 9 million clients, so we've got about a market share of about 44%. You can see we're very strong in the 21- 40 age groups. We're focusing our marketing and our strategies on 20- 35.
The one I think which is interesting is if you look at our 41-60. 11 million or 12 million people in South Africa is in that age group, and we've got a market share of 38% or 4.5. About 4.5 million people has actually got an account with ourselves or active account. The people over the age of 60, there you can see we've got a 20% market share. I think the challenge here is now to take those 15.7 million clients. There's a lot of clients where we're not first in wallet. We're not the first card that you actually take out, and we're second in wallet. You can argue that the people that bank with ourselves, that 4 million, that quality clients, they will take out our card first.
It's actually how do we actually change it and how do we make certain that we actually can get these people to use our card first. I think if you look at our full bank offer, and I just want to unpack that for yourself, is if I look at Transact, that's our main account. You can see what is interesting is we've done 5.3 billion transactions last year on it, up 17%. We've got a market share on real-time payments, RTP, of 37%. Then you can see quite a lot of new solutions that's been launched. I think the one that excites us is that you can now open your account on the app. You don't need to go to a branch.
If you want to lie on your couch and you want to open up a Capitec account, you go through, we do a selfie, we go to the Department of Home Affairs, and you can open your account. Then we will deliver your debit card out to yourself. From July, we will deliver your Credit Card if you qualify for a Credit Card. There's quite a lot of things that are happening on that space. On the saves side, we offer you four saving plan, which always is, to me, quite nice if you talk to clients is that they say what they like about it, they can name it. You can name it, I'm saving for something. Let's say a car or a holiday.
You now call it a holiday account, then you put your money in there, segmented away, you can use it. You can see we're still offering very strong on interest. The lowest interest is 2.25%. We paid out ZAR 4.4 billion this year on interest to clients. That was a little bit quick. If I look at insurance, we offer Credit Life, which cover you from retrenchment as well as for death. We basically were covered for death for a big portion of last year, with retrenchment, we were self-insured. From the 1st of May, we are self-insured in both of those areas. We've seen a big increase in retrenchment claims as well as death claims, we've seen in the last two, three months, we've seen a big drop in that.
On the Funeral Plan, I think that's where we've done exceptionally well. Maybe the best stats on the ground is that 37% of all new funeral policies sold is a Capitec policy. If you go and look at rand for rand, we offer the best coverage ratio for the lowest premium. On the credit side, that's where we've actually worked quite a lot, offering credit up to ZAR 500,000 for combined products. If you choose between your Access Facility, your Credit Card or your loan, you can go up to ZAR 500,000. We've launched Access Facility. You all know about Capitec Home Loans. Now in April, we've launched Purpose. We've spoken about Purpose, you can see we've launched Purpose now with CTM, with Saadia, with Mediclinic, and WeBuyCars. That's a big focus for us.
How that actually works is the client applies for credit. They apply in store. We pay the third party, so the money doesn't go to the client, it goes to the third party. By doing that, we can actually price the loan at a much lower rate. For us, that's a very promising new concept that we've used. I get quite a lot the question on what is our business model, and we always ask the question is, how do you feel about just being digital or how well it branches. We see these three circles as a critical part of our offer, because we believe you need to have a branch. The branch is a platform where we sell from, where we engage with the client, where the client can sit in front of us. We see it with funeral.
85% of our funeral policies are sold in-branch because the client is very serious about his funeral policy, and he really wants to make certain he takes out the right cover. You've got your digital side, where you self-help, and where the client can do his transactions and operate. As you know, there's 8.7 million clients on. The one that we're really focusing on now is client engagement. Because as the client is getting less and less into the branch, we need to engage with that client and make certain that he actually takes the right decision and is informed of new products and new developments at Capitec. There's a tremendous focus on the client engagement and certainly making certain that he's part of the Capitec family. We see those three components as crucial of our strategy going forward. The future.
Everyone is asking us about the future. If you look at the future, we first need to start with international. If I look globally, we all know that the vaccine rollout has rolled out in Europe and America and all the other countries. America's at about 55%. The U.K. is at 65%. Europe itself is at 45%. There has been very strong stimulus packages given in Europe and America. That is stimulating the economy. When I'm talking to investors and people abroad, you can clearly see that the world is starting to normalize and people are just getting back to normal situations. That has got a very positive impact on South Africa. We've seen what the Rand, dollars has done. I think if we ask any one of you six months ago, will the Rand be at ZAR 13.75 or ZAR 13.85?
We would have laughed, but there it is. There's a very strong market for our commodities, and commodity prices has climbed, and that is very good for South Africa. We've also had on the food side, and especially on the farming side, we've done exceptionally well. For the first time since 2002, we had a surplus on our current account, and we had a very strong inflow in tax income. I think a big portion of that tax income is actually coming from our exported commodities. That is plus, a very positive trend. I think, what is happening in government, what is happening, meaning on the ANC front. I think what it's done is bring in a culture of accountability and a culture of doing the right things. I think we won't see the effects immediately, but we'll see it over time.
I think overall, that will have a very positive effect in South Africa. If you look at the results of companies as it's coming through now, you can see much better results coming through from all companies right through. What are we seeing in Capitec? We've seen our client inflows, apart from hospitality, basically at the same levels. We're starting to see overtime coming in. People starting to pay overtime, and we start seeing appointments happening. I think that is very positive. On the demand side for credit, applications were about 15%-20% down up to about in February. We basically now March, April, May, we're basically back to normal levels on that. I've already mentioned retrenchments and death. We're seeing on retrenchments, just to give an indication, we see about a 20%-30% drop in retrenchment rates coming through and on death.
I think death is going to be interesting to see what Q3 is going to be, but we're seeing very positive things coming through from there. We've seen very strong transactional volumes happening right across the group. If I look at our merchant base, about 26,000 merchants that's transacting. They're basically back to pre-COVID levels. If you look at this, it is all showing signs in the right direction. We've spent quite a lot of, myself plus our senior exec team, have spent quite a lot of time visiting our branches, especially branches in the rural areas, Hazyview, Bosbokrand, all those particular areas. We're seeing a strong positiveness of people in those particular sectors, and a strong informal growth coming through. I've always said, many times, I think that's the one part of the economy that we underestimate completely.
I think the factors to worry about is a third wave. I think it's here. The question is, how are we going to react and what the impact is going to be? Hopefully by the end of this year, we will have 50%-60% of South Africans be vaccinated. I think the two or the three that worries me the most is our high unemployment rates and the inequality gap that has been caused by COVID. If I just look at education, for us, it's very important. I think for South Africa to be successful, it's important. If you haven't had access to a laptop or data, it was very difficult to get education in South Africa during COVID. I think that inequality gap is still going to create problems for us going forward.
I think the interesting one is the wage gap or the wage negotiations. Government's stance is no increases. I think if you look at what the demands of the unions are, very unrealistic, coming up with 15% minimum wages of ZAR 15,000. It doesn't make sense. It shows you that there's a big gap of understanding really what's happening in South Africa and what we need to do to actually correct South Africa. I think overall, we're seeing a recovery. I think the concerns is the ones that I've highlighted. I think the most important thing is for government to actually implement all the strategies that they have actually spoken about and that they want to implement. I think that's the key to make South Africa a successful country.
If I look at what are we going to focus on, I think the most important thing is scale. We've got 16 million clients now on our base. How do we optimize that? How do we make certain that we are first -of -wallet? How do we make certain that they actually make use of full product range? Partnerships. I think we've done a very good job with partnership with Sanlam, SA Home Loans, EasyEquities. We're continuing to look and say, how can we partner with certain people that's strategically important for ourselves, to partner with Fintechs, especially. That will be a big focus. Digital and data, we believe is going to be the most important going forward. Data, the whole payments, e-commerce space is for us important. If you go look at China now, if you want to pay with cash, you can't.
I think we need to drive that. It's not only Capitec, but it's the South African totality, because we need to get people to do the electronic payments. The moment you can start doing electronic payments, you can then provide a bank account to informal sector or small businesses, and you can score, you can provide credit. There's a lot of opportunities then. Data. I don't think I need to elaborate on data. I think everyone knows it's the new oil. New solutions. We're focusing quite a lot on credit and payments, and then on the rewards program. We've always said we will not go into loyalty the way other people have done, in with points. We want to keep it simplistic, and that will be launched quite soon. Business banking. Business banking is on track.
We're building something completely unique on a digital platform. We're still on track to launch that mid next year. If I look at what we need to deliver, I think the most important is you can't deliver anything if you haven't got people. For us, it's all about developing talent and growing future leaders. If I look at the most important thing is to really understand the needs of our clients. That's why we're spending quite a lot of time in the market understanding what's happened. Because during COVID-19, we were sitting in our offices at home, and we didn't understand what was happening. We're spending a lot of time out there. I think client needs is going to change quicker, and quicker. We need to align the objectives of retail and business banking.
I believe there's big opportunities if you combine those objectives and align it. Culture. There's a saying that culture eats strategy for breakfast. We're a strong believer in that. We will continue building our culture and making certain that our staff and our people can make decisions without thinking, because it's actually part of their DNA. Talent. We continue to appoint new people. It's actually quite scary. I shared with the board this morning, we currently need to employ, in the next three to four months, about 400 people. About 300, 400 of them is in your digital IT space, client-centric and innovation. We're struggling to find the right skill levels in South Africa. I think that's a big opportunity for ourselves and make certain that we get that right people and we develop them. Working from home, working from the office.
We're strong believers that you can't only work from home or you can't only work from office. You need to have a balance between those two. We've worked quite hard in the last couple of months to make certain we're finding that the right balance, and we have that flexibility. At work wide three, we can move our people back. At the moment, when positive signs come through, we can actually bring the people forward. Multi-skilling. It's interesting with direct lending now, which is situated in Bellville. We've created the capabilities that we can use our extra capacity in our branches to help giving direct loans to our staff. At the moment, there's a peak in a particular branch that is quiet, we can move those volumes to that particular branch and make certain we can help our clients.
We believe multi-skilling and micro jobbing is the future. We also believe there's a big opportunity to South Africans to actually use their skills and sell their skills abroad and actually sit in South Africa, and you don't need to move. Sorry, I missed that. I think if we look at the year ahead, we're very positive. We believe in the brand, we believe in what we've built, so we're positive about the future. Thank you very much. We'll take any questions now. I think the first question, I will just read it out. It was indicated that reinsurance providers covered retrenchment and life cover for customer loans that expired, that the reinsurers decided that the COVID-19 risk was too great, or what was the reason Capitec was forced to self-insure as a temporary measure?
No mention was made if this resulted in a loss to the company considering the premiums versus the claims settled. Will Capitec plan to in future use reinsurance again? I think, yeah. One thing that COVID has learned us when it came to renew our insurance, nobody wanted to touch retrenchment, so we had to go into insuring it ourself. We still managed to get death insurance. I think we've shown very clearly in our financial results, and I know I've covered it in my presentation in April, that we still made a profit out of insurance in totality. I think it's learned us and decided whether or why do we need reinsurance. Currently, we self-insure it, but it will be something that we will cover from time to time.
Second question is, the takeover of Bank of Lisbon, subsequently called the Mercantile Bank, has resulted in staff changes and introduction of Capitec personnel into the bank. This has left a void of Portuguese-speaking persons who were the backbone of the Mercantile Bank loans. Are there at least some existing Capitec staff who are capable of speaking Portuguese that can be used to fill this void? If I look at Mercantile, all the people that could speak Portuguese are still there. They're still part of us. Nobody was retrenched, nobody was asked to leave. I think what we definitely are doing is we want to create a business bank for all South Africans. We will be make certain that we can handle all languages.
I think a big factor of that is if you look at our branches, we employ people from the community to serve the community, and I think we'll use the same approach when it comes to Mercantile or Capitec Business Bank. I think there's no more questions. André, is there any other questions?
No further questions.
Thank you very much. Normally would have offered wine, but this is virtual, so have a glass of wine on a Friday afternoon. Thank you very much.