Good morning, ladies and gentlemen. It's a pleasure for me to announce our interim results, for August. We're going to start with a video of what our employees say what we've done is we've busy with strategic sessions now thinking about, the way forward, and you can't actually visit branches and understand what's happening. So we thought it would be good to actually share what, or have a video on our branch people and what they have experienced. Actually the unsung euros, of COVID, because if you look at our call centers, they work from home, head office work from home.
But our branch people was up servicing our clients. So let's hear what they've got to say.
In 16, the loved ones, that is the worst beer that we have right now.
I recently lost my aunt to the coronavirus So that's a large deal.
Planning, I would say, has been a challenge for us because we're concentrated that to people being upset or the amount of clients you can have in the
being someone who wear glasses, having to wear the mask as well as the face shield and whatnot. So always do we help clients with everything, especially with their phones. Now we cannot even touch their phones.
So we can't connect, like, we usually connect with a client
sometimes, for married couple of companies, alright, husband and wife. We can only have the husband or can either have the wife. They feel they don't understand why come if they live together, why can't they sit together and be served together?
Since this COVID thing now, the clients have realized that they need to go to a more digital platform.
It's only a fee finding it difficult to adapt, you know, to some of these new services.
Oh, with the low income, obviously, becomes a bit of a challenge. Because they used to coming into the branch and asking for services.
So the Bank Beta Champions job will be to assist, literally assist clients to do the banking themselves.
So we have seen a high increase in, trade and take up actually from our clients. So even if the client is a multiple income, so it's kind of something that to go through, credit assessment teams. There is a demand for other products such as life insurance, Costco, have vehicle insurance.
The company has done significantly well to ensure that we are covered and our health is protected.
Just by giving us that that security was the first, like the bonus payment, which told us that our employer is a secure environment to work
The introduction of the app and the wait has been working. I believe you are doing very well.
It had been a challenge, but each and every us are trying to do our best to get over that.
If we look at the CapEx reflecting on the 4 6 months, I think the one thing that stands out, there was a tough environment from a credit perspective, but then from a transactional income side, we did exceptionally well. Our income from operations is up 10%, which I think is been good. But then you are the moment you bring in, the credit side, we've taken the whole COVID provisioning upfront. So we've provided the extra 4.2 1,000,000,000 for COVID, and that reflects then into our net profit. That's, down 79%.
At, 650,000,000. We're seeing a very strong growth in clients still, up 2,000,000 from last year, but I must I would say in the last, 6 months, it actually surprised us, but we picked up quite a lot of the social grants that's been paid out, the so called 350 rands that's been paid out by percent of, the clients that we acquired was for the 350 rand, but I think still very strong client number growth. Client income impacted by lockdown, I'm going to elaborate on that later on, but what we're definitely seeing is that your lower income people has been affected more than your higher income. But on the credit side, we're seeing basically about the same levels of income than we saw before the lockdown. The industries are differently starting to recover.
I think the one that's still under severe pressure is the whole travel and hospitality industry. And then very strong digital adoption. I think, if you look at our digital side, our digital, transactional volumes is up 2% from last year. So I think that tells you that people is actually starting to switch to digital, but cash is still, still, people are making use of cash. We have the same levels as last year.
And the one that surprises us to a certain amount is that there's still a very strong savings culture. Our savings growth is still there, but a very subdued appetite for, for credit, I looked at TransUnion numbers this morning where they looked at unsecured and said that the number of applications, year on year is down 47%. So we're definitely seeing that same We're definitely operating at about 35 percent less on the credit side. And I think it's a function of people are scared to take credit. And then we must remember, if you look the payment breaks that's been given by the industry and totality, that had a major impact on the need for credit.
And remember, if a payment, if a person taken a payment break, you can't and will automatically qualify for credit, for a 12 month period. So that has got an impact. But I think overall, if you look at our results, I'm actually given, given COVID, I think we've done well. There is our results, profit of 7 1,000,000, but if you look at our 31 May, we actually said we made a 400,000,000 loss in the first 3 months, so we've recovered with a 1,000,000,000 in the second half. And I think what is very important is that from a COVID perspective, we've taken provisions upfront the best to our ability to make certain we are covered.
So you should see a normal performance going forward, but I think everyone is still worried about what is going to happen in October in November and then next year. Interesting if you look at the different key, ratios, the one that for us is very pleasing is that our net transactional fee income plus renewal income covered 97% of our operating expenses. We've cut back on our operating expenses. I will allude to it, in the next slide. But yeah, I think, we've all said we want to cover 100% of our OpEx.
We want to cover both transactional income. And then transactional fee and funeral income to net income, if you, if you leave the impairment charge in, then it's 87 by 86%. If you take that out, 47 percent of our income is coming from transactional income, and it just shows, again, the very strong transactional by suite variables and our dependency on credit, has gone down over years. Cost to income is straightforward at 40%. Retail is operated at 38%.
And, business banking is at 56%, giving you an average of 40 So I think, yes, in line with our expectations and the capital adequacy, the drop from 34 to 31 is clearly when we bought Mercantile, and the difference between 3130 is purely rounding. The 1 is 30.4 and the other one is 30.5. So I think the message here is that we've got a very strong CAP adequacy ratio, and we've got sufficient, capital. That is just looking at the income statement. If you look at what we've announced, our group results for August 2019 doesn't include Mercantile.
So we've just done a comparison that you can look at group versus retail, or 2019 versus 2020. So you can see if you can if you leave Mercantile in income from operations, it's up 10%. But income from, if you compare like for like, we're up 4%. And then you can see the COVID impact, 4,200,000,000 and then extra $190,000,000 that we've brought in for Merck Control, which I will lead, later on. And then, from a retail perspective, we've brought in OpEx was 2% down.
We basically, when COVID happened, we've actually stopped all recruitment of people and we've only started opening up now in September onwards. So we again, starting to employ people. We had to bring into call centers and our branches, we're bringing in about 200 people, given the need and client numbers that's growing. And then on our specialized fields on data science and on digital, and on credit side, we employ, people. But I think if you take out the credit impairment charge much for COVID.
I think relatively strong performance, given the economy and what's happened. And given that If you look at Capitec, these results are basically 100% in COVID because it actually covers the periods from March to August as you all know, COVID started in third quarter of March. So I think a strong performance from there. If I look at the retail growth, It's nice to talk about the 14,600,000 active clients. Remember active clients, our definition is that this person is earning us income.
But what really drives it is the 3,800,000 banking clients, which is what we call quality. So that is clients that has got a stable inflow, it's got promote banking and they use the app. They've got card purchases and debit orders. So that's our definition. And then I think very promising is that forty percent of our clients is in a young age group, which is potential for the future.
5,500,000 of our clients are savings clients. Then on the insurance side, we're basically at active close to 1,000,000 active clients, on ensure on, funeral. And the credit lines dropped slightly, and that's purely because of the fact that we, when COVID happened, We actually cut back credit with about 20%. So your credit lines will be down, from that perspective. But I think this is actually the real client growth that we actually are monitoring and that is actually driving the transactional income.
What we've seen definitely in the, in COVID is that the lower income segment were much more severely affected. If I'm talking lower, It's people earning less than 7500 rand. The people are earning 20,000 plus we've seen basically the same levels as before. We've seen a a reduction in overtime and bonuses, basically everything has been stopped, but it's quite interesting. If you look at over time, for example, talking to some of the owners of construction companies and other businesses, what they have done is they have cut salaries to, let's say, 80%.
And then now that we've reverted back, the people actually catching that up with the over time and bonuses was that gap between the 80% and 100% that 20% was of interest free loan that was given to the people and now it's been catch up with over time and bonuses. Casual and contract workers were severely impacted wherever there's schedules or contract workers that's been cut see it when we talk to the SMEs, especially your medium and biggest eyes companies, what they've said is they've their turnover is down 20%. But they've cut their expenses, with 20% and that's normally casualties and contracted workers that went out first. And I think that is what we're seeing a big driver in, the two million people that has lost their jobs, in the last 6 months. And on the SMEs, what we've seen is the people that's earning less than 6, less than ten people they were the hardest hit, in COVID, and they're really struggling.
They have either just closed down or a scale down to three or four people, So yeah, I think it's a a tale of 2 sides. You've got your high income people that is, that is a positive or basically in the same level. Your medium has been affected by about 5% down and then your lower income levels has been severely impacted. If I look at our transactional volumes and this, I think, gives you a very good indication of COVID You can see here digital. The dotted line is last year, solid line is this year.
You can see how strong digital has grown, and digital year is the app. Years is D plus the internet, who can see we're up 52%. So very strong growth on the digital side. You can see on card purchases, we, up on last year, we, on 82,000,000, compared to roughly about 18,000,000 of last year, but we're still down on 91,000,000 for March. And I think that's purely your travel and leisure industry that hasn't really started in that particular site.
Interesting if I look at our merchants, our merchant base is at higher level in August that than what they've traded in March, which is quite positive. And then on the cash drive, you can see the dip in April, and then we by it back to normal levels and then branch, a big drop in branch levels. And that is in line with what everyone is saying. That people are moving to digital, and I think what is important to highlight on the branch side, what we've included here is purely transactions from a financial, where there's financial income. So if a person does an inquiry or balance inquiry, that is not included in the volumes, but we're still sitting with 4,000,000, 5,000,000 clients that's coming into our branches every single month.
It gives you a good indication of what is happening, in the economy. This is just our, swipe so that you can see what's happening in a different industry. The interesting one for me was restaurant and percent level of March, March this year. I think, that sells the whole deliveries and people eating from home, ordering food is probably why the 96 has actually came came in so strongly. I think there's basically no cash payments.
So that is actually purely swap payments. And I think you can see that's where the restaurant and takeaways has actually made a plan and actually recovered back to normal levels. We can see the April level at 5% a hit on themselves. Telecommunication up 9%. Gross series, interesting, for me was April up 5% on March.
So you can see the spending patterns went to the grocery side. And the one that stands out is home maintenance that, correlates with when I spoke to the CEOs of Cash Bull, CTM, etcetera, etcetera, that they have in record months, is very strong growth in home maintenance. Do it yourself. I think everyone has realized to work from home. You suddenly need to upgrade your home.
You need to look at your office you need to look at certain things that was always wrong, so very strong growth in, maintenance, side. If I look at our digital clients, you can see now we've got 7,300,000 digital clients in totality, but it's made up of 4,000,000 active bank clients, our app clients, and yours is D5.2000000 active clients. So in total, we've got 9.2 clients that is making use either of banking app and USST. The 7.3 is where a person because there's some of the people that's both using the app and the users team. Then we've launched sent cash in May 2019 with Shoprite Checkers, in this year, in March, we've launched a whole, where you can do same cash to ATMs and also Massmart, and in October, we're launching it with Pick N Pay.
So you can clearly see strong growth in cash then, and that just shows you the need for people to actually send cash to friends and relatives. This is all in South Africa, so it's not sending cash to Zimbabwe or Lesothu. But very strong growth in this particular, area just satisfying the needs of, of, of the clients. And then the one that excites me as Scott not present, and that's the future of payments where you pay, with QR, etcetera, etcetera, plus 2,000,000 clients that has actually made use of partner present in the last 6 months 4,000,000 transactions that's been performed. And that's a big focus for us going forward, to make certain that we play in the payment space.
E commerce spice, and the digital payment, spice. Here's the savings, or deposits, right? What for me is interesting, and that's why I put the slide in like this, is that you can clearly see what happened in April. People couldn't spend money and suddenly our deposits, our retail core went up from 55,000,000,000 to 62,000,000,000. And then it dropped back, as people were starting to spend again to 60 and has gone up to 62.
On the fixed term saving side, we're seeing growth of going from 33 to 35. The growth rate is slower than last year this time, and you won't expect it given the pressure that there is on the economy and people making use of their saving money to survive if income levels are are lower. The funeral plan, is still growing very strongly. Our average sales last year were 100,000 per month. In COVID, we dropped to 70,000, but we're back in August and Denver back to normal levels of between $90,900,000.
You can see the strong growth in, of people that's active from 641,000 to close to a cell, to a 1,000,009. The drop is purely because of very little sales that went through. And then on the collection side, we're seeing very strong. We've implemented the Mercantile payment collection system where our collections has actually gone up, from 80% to 9 percent. So that's been very strong and very interesting also the average premium that's moved up from 190 rand to 210 rand So we're still very happy with this product.
The product is going very strong. I think the only interesting one is if you look at, death claims, We actually saw a spike in June July on deck claims, no claims coming in in April or May, and then dropping back in August September to to normal. But if we look at the credit side, our debt claims is far below our expectations. We actually saw the opposite. So we believe there's still very strong growth, in the funeral side.
I think the question that everyone has got is retail credit. And if you look at retail credit, the way we've handled a retail credit is we've broken it up into 3 phases. We set the initial shock. That was that March, April, May. In the aftershock, how do we manage the aftershock and then the recovery.
And the recovery is actually understanding what is happening, not only in South Africa, but also internationally what impact internationally has got on our clients? Are we exporting? Are we importing? All of those factors are being brought into consideration when we look the recovery, for us. I think the, point that I want to highlight, and which I believe we did very well is that We're very agile on our, credit risk management.
We were actually basically on a daily basis monitoring exactly what's happening on the credit side. And we've made, changes to our credit policy or our appetite on a continuous basis as we see what is happening in the economy. We're analyzing the economy in totality internationally as well as local. We're looking at the industries. We're looking at employers.
Looking at clients, we're looking at income levels, we're looking at behavior. So we're going through the whole client profile in totality. In the first one, initial stock, a shock, I think the first thing we did is to cut our credit policy with 20%. So industries were cut more than other industries, but on average, about 20%. Our branches was actually, operating at a 50% capacity at that particular stage, course of level 5, and which impacted your sales.
And then, we focused completely on giving payment relief to our clients. So we gave payment breaks as well as variable, we're reshelling to our clients. Phase 2 was in basically about July, we actually understood better. We went to level 4. We opened up slightly.
Our branches was operating at 70%. And then we launched the access facility in early, early May, and I will allude to the access facility. We understood that we are left to have, I help our clients with emergency loan an emergency loan is purely that the person has lost his income, in April. So what do you do? You need to look at 3 months income, and then we had to average things and actually exclude, April.
So we launched that loan to help our particular clients. We've granted about 25,000,000 in that, and we've discontinued that particular loan. And then what we focused on very strong I think where we differentiate it from that all other banks is, bringing in behavioral incentives on our payment I'll allude on that later on more detail. We'd like further, we'd like further in September. And as I think it's in line, we're currently looking again at, to look at making changes in October November, that will be based because there's certain places where it's going better and certain places that's getting worse.
And then I think what is important, we've seen Larkin, the travel in Fidelity Industries, those people are still under pressure, and we have limited relief campaigns, especially on those industries. I think this gives you a very good, indication of the ways we've managed, COVID. I'm going to start with government in parastatals. That gives you our exposure to government municipalities in parastatals. So that's 45% Manufacturing 18% and mining 11% and travel in leisure 2%.
Then we did, as I explained, we're looking at the economy and totality. We look at the industries We took a risk view. And on our normal PDs, we've added, extra PDs a probability of default on those particular industries. So if I track mining, we've, in our first, April forecast, we added 10%, and in the August forecast, we dropped that to 8%, and these percentages and risk profiles was used to determine our COVID provisioning, to understand our risk, and that's been brought in. So if I think the easiest one is on travel and leisure.
You can see that drop off 10% as we're understanding and we're seeing better performance coming through. This gets updated by 6 on a weekly basis. And then on monthly, we make calls to say, do we have to adjust this or no? Because they didn't also get brought into our provisioning models to adjust our provisioning models where necessary. This was the interesting slide, underlying inflows remember, we stated before that we're actually taking we've actually moved away from the lower income segments as well as the small and tiny companies That's why we saw the biggest risk.
And I think that's also reflected in the income levels here. You can see what's happened on average people are earning our credit lines is earning 95 percent what they have earned in March. Government is basically about 100% the same. And then you can see travel and leisure that's dropped to 68% in July, but it's slowly, it's coming up to 72% and that which will probably, climb, and that will also, if you go to the previous slide, you will see the impact on our probability of default that will probably improve as is going coming through. This is the way we grant, and that is in line with our strategic decisions.
You can see if you add up the below 10,000 rand and this is Kraus salaries and it's Kraus advances, what we're currently granting is only 14% is, for people earning 10,000 rand and below, and that's Kraus salaries. And then you can see how strongly we've grown in the 20,000 plus to 52%. So that brings you just gives you a feeling of our credit risk and how we've managed the credit risk. On the COVID relief, we've given, in total, 6,000,000,000 on, on a 5,500,000,000 on pain prices. And then on the reschedilings, we've given basically 2,000,000,000.
I think what is important directly affected, that is where a person has lost part of these income or majority of these income. We've given a payment break and where people has been indirectly affected. They've lost income in the household, we've given variable reshealing. And then just to explain how, the payment practice works is that If you grant in April, appointment break, April, by June, you will pay nothing. And then July, you will pay 60% of your installment, almost 80% in September, 100% and exactly the same on the variable rescheduling.
So you see peripheral reshealing your immunity starts buying a smaller portion and you ramp up quicker to 100%. And payment break, we give you a 3 month break and then it's slowly but surely building up to 100%. If I look at the behavioral incentive that we've given the client, I think this is where we're completely different to what is happening in the industry. We've basically said that if you pay your installments after your payment break or variable or reshaling, for the 1st 6 months, we'll give you 50 off of your 1st 3 months of interest. And if you do it, for 12 months, you'll get, a 100% off I think what is important here in all the models that we've run, we're trying to change the behavior of the client that he focus on repaying Capitec, And then if he reprised, there's a benefit for him, we're losing a bit on insurance, on interest, but we're gaining on provisions.
So the net effect if this works the way we think it is going to work, it will actually have a positive impact on our income. And it's also got a very positive, relationship with that client, and you built that client, for the future. We've always said that we wanna have a relationship a client over a very long period. There was a very comprehensive client communication journey where we communicating, communicating Still now, we communicate on frequent basis to those clients to inform them and to make certain that they understand it. If we look at the payment breaks, the success, the first payment success on payment breaks is around about 80, 82%, very much in line with our expectations.
And on the second payment, it's 93%. The question is why is the 93% versus the 83%? The people on 83 that hasn't paid actually falls off, and moves into arrears and is handled normally as arrears. And then a 93% of the 83 is then paying. And you can see variable rescheduling, we're running at about 92%, very strong performance both of these are in line with our expectations.
Why is payment break at 83 versus variable at 9202? It's purely because In the payment break, we've given it to people that has lost their income or as a big reduction in the income, while variable reshaling is for people that's lost income in the household. So that's the difference. Both these are performing 100% in line with our expectations. Then the question on retrenchment risk I'm going to kick off by saying on death.
We struggle to get cover, but we managed to agree with our reinsurers to reinsure our death risk from the 1st August. That's interesting that death percentages that we settled on was actually the premiums were lower than last year, So that to us is positive. We just didn't want to take the risk on COVID. Currently, the death claims are lesser than last year with 20%. Then on retrenchment, you can clearly see the clients that we've paid in 2020 and then in 2021.
So if you look at that, the 381 versus the 248,000,000, but you can see what has happened. We saw basically very little claims coming in in April, March, April, May, then it spiked in June, and it's definitely coming down, So we're seeing a downward trend in our claims. And then we give you a breakdown of what has been paid by the reinsurers and what has been paid by ourselves, you can see what we're buying currently is about 60,000,000 per month. And I must just mention, and it's in the sense, that there's an RBNR of, $213,000,000, and that is, being audited by by risk and accepted by god risk. And that's straightforward basically a provision on future retrenchments that is in, our figures.
So so far, retrenchments are performing actually much better than we anticipated, but I think it will be very important to see what happens in September, October, and, November. If I look at our, provisioning, you can see there's a 5% growth in book you can see the 39% in growth in provisioning. I think what is important is, just over 4,200,000,000 that provided. I think overall, if you look at our percentages that we provided last year, it was 20% and this year at 28%, I think if you look at the up to date, it's increased from just over 6% to 8%. So we believe we've got a very conservative provisioning model as I mentioned to yourself, we are updating this all the time as we are getting better information.
Then the one that I'm really excited about is the new facility, that we've launched in May, it's exceeding all expectations. I think what is important a lifetime facility. So if you keep your up to date and you're repaying it, then you never need to go back to a branch So from that perspective, you can see the interest rate interest rate is 17%. But you're taking out the cost, of, going to a branch and reassessing the clients. The product range is free from 3 months to 60, for me, what is quite nice is that, for the monthly clients, the 1 to 6 traditional, short term loans that you can charge up to 60%.
We're out of that market now, but that's been replaced by the, access facility, The only people that we're providing the 1 to 6 month loans for is still our weekly support line, please. What is also important is that if a person doesn't use the credit, he doesn't pay any monthly fees, and what is happening is let's say you've got access facility of a 100,000 rand, and you don't work draw on it, then you pay down by interest. So if you draw 10,000 rand, you'll pay interest on the 10,000 rand. If you withdraw 20,000, you'll pay interest on 20,000. With term loans, it's completely different, since the moment you're taken out that line and you start, buying interest on it.
So I believe this is a much better product, and we're exciting about it. We've already got a book of $2,500,000,000 that's taken it up. The usage of that is about 50%. The September figure is already standing at close to 3,200,000,000. So this product really taken up, and we are very excited about, this product, going forward.
If I look at business banking, think, everyone has seen it. We've made a loss of 47,000,000 on the business banking. We've increased our provisions quite a lot the total provisions is up, 260,000,000 of which 190,000,000 was covered. I think what is important is We looked at our whole book. And if you look at the securities that we've got against the book, and we've taken certain head cuts on it, so if we look at commercial property, we'll probably we would have taken on the normal valuation, we will take a higher haircut than for example on, individual mortgages So we went through that book like that.
We've classified it in a high medium, low, risk. We've looked at who's taken payment breaks. We've taken who's taken a COVID loan. All those factors were taken in consideration in that provisioning. So we're fairly happy with that.
The lower lending income investment income is purely because of, economy. What is interesting is that if we look at our overdraft, that we have given people, the normal usage in March was 65%. I thought that will go up, and we actually asked the team to look at it. So we were scared that if you start getting to 100% that you're under pressure, whether it's interest is the average overdraft usage now is 45%, and you can see, how people are not don't want to use credit and how the payment breaks is actually used. And then I've given you also then just a feeling of the client, client base.
What is for us very encouraging is that we're still having every month record month record months of new clients actually joining us, and on average, we're doing now about 3000 clients per month. Joining the Mercantile group. So we're very still very positive. And then on the deposit base, we saw a growth of 5% to 5% up from February. Still very strong.
The COVID loan scheme, I think everyone is criticizing on it. But I think a function of, the payment breaks that's been given in the industry. We've got a 1,000,000,000 from the reserve bank. We up to or we've given 500,000,000 and our best estimate is we will probably move up to about 700,000,000 to 750,000,000 We've given CHF 4,200,000,000 in COVID reliefs and payment breaks, two people, to close to 2000 accounts. On the first payment success, we are on a 77%, which is very encouraging.
And then there's about 8%, that we actually helped the second time that's, for example, on the travel and hospitality industries. So about a 4%, 5% of those people are actually in arrears. And credit impairments, I think I've, alluded to the 265, uh,000,000, and cover specifically 190,000,000 can see the credit loss ratio because of our conservative, we were we are in the figures, we've gone up to 5% compared to 1.1% in February this year. I think, the one area that we've done, exceptionally well is focusing on our people and on the community. We've implemented new group structure successfully.
So we've got Karl Kumba that is head up the Mercantile division. And then we've got in clearance, adding up retail, and we've created a shared services, to focus on shared services for both sides. For remote working, people are working from home. I think our biggest challenge now is actually get people back to work, at the office. I see Anton Friend is smiling here next to me.
Yeah, I think that's the challenge. Our belief is that you will have to find balance because if you want to build culture, you want to build teamwork, you want to motivate people, you want to bring in new people, you need to work at the office. And if you're really focusing, then it's fine to work at home. So that's the challenges going in. I think the same with virtual learning and learn ship, we've changed our firm foundation program where it was 100% with all people had to come down to Salomoche.
We had to do it virtually. And we still trained in this whole period of COVID. We've trained, 1600 people. And then the one that worked very strongly for us is our little bit of talks We had every Thursday morning for our for an hour, we had our senior leaders and middle management and just talking about what's happening in the business and what's what's taking place. And then town halls where the functional areas were actually talking, to their people up to 5, 600 people attending our address quite a lot of these town halls, making certain that we communicate, communicate, communicate during COVID.
And then 3 20 people but we've actually moved from branches to help us in other areas like in our call centers, collection centers, now risk areas, and that actually gave us a very good indication of where we need to go, and I'll talk about it later, is that our people should be flexible and should be able to work in different departments and different, areas. And we've completed a full engagement survey, during the last 3 months. And overall, we scored 84%. So we're happy with the engagement and the commitment, of our people. Social responsibility.
That's where our staff people and and and people and overall has come up. You all know that we've given funds to, gift of the givers and solidarity, but what we've changed is our employer volunteer program, because we believe it's very important that we're part of a community. So every staff member is getting a 3 days extra leave if they're part of a community program. And then for every one rand they collect, the company gives 2 rand. And what is Stephanie, I can show you many pictures of where our people was involved in a community, helping community and supporting, the, community.
And then financial education, we've launched a look at our academy, now with digital learning, it's 5 courses, before we've actually gone above the line at authorizing it. So we've already got 18,000 people on the platform, encouraging our clients and our staff to actually get more financial educated And that's also where the live, living it up, the game that you actually play and you complete a certain level, and then you go to a higher level, it's a good drive for us to actually get our financial education levels up, of our client base and even our own staff. Future focused, I think, I'm not going to go through all of these, trends, but I think what has happened in the past is completely gonna change, and then we need to understand the change in our client needs I've already mentioned the whole move from ecommerce, digital learning. I think there's a massive opportunity in, in South Africa, still don't understand why school is operating from 8 to 1 and why if you're sitting with a top end school that that particular teacher can't be recorded. And digitally, we can actually, send that out, right across, South Africa.
So for me, there's a big opportunity in South Africa to actually, instead of spending money on salaries and an infrastructure actually to spend money on data and and iPads, etcetera, etcetera, and actually make certain our children, learn if you want to grow South Africa, that's where it all lies. I think health is going to change completely. The old way of sending everyone to hospital doesn't work. And I think if you look at all of us, it's got smartwatches, I think one who needs to use that information much better to actually make certain that you get the right The one I like is traveling, and I've got a mixed feeling. I was traveling about 6, 7 times a year abroad but I'm really enjoying staying at home.
So it's that mixed feeling. And I think that's the whole thing about, connecting with people. So one will have to get that balance, but for sure, traveling up to Joburg every every week is for sure going to be out and we will travel much less. So that will have a big, impact. And I think what is the one thing that's actually really come out is where we've covered is how important family and community is a different way of life and the values, again, that is important rather than being looking at material things, buying things, rather spend quality time with your family, friends, and then in nature, I think that That is very important.
While I've put this up, we're spending a lot of time understanding this, we're talking to our clients, talking to our staff, and all our strategies that we're busy formulating will focus on these particular, areas. If I look at The business bank, the Section 54 will be completed by November. So then Mercantile won't be a company anymore, but then we'll be a division and then we'll slot in that was in line with our strategy that we're building a new digital bank, that we can scale, based on the Capitec, In the moment, we're happy with that. We estimate about 24 months, then we'll launch it under the Capric Brand. So then you will have Capric Retail, then you will have Capric, business bank and we are excited about, what we're building and where that is, going.
If I look at The core for retail is understanding the client needs. We believe very strongly on ecommerce and digital banking, the payment spice, how do you make it seamless, paying by cure a QR codes? So that is a very big, focus for us Making certain that your your business experience of our merchants is slick, it's integrated, it's they've got valuable information available to themselves and that we inspire our 14,500,000 clients to actually look for the business banking clients of ourselves and to make that experience a slick credit. You all know that we're busy with purpose lending, on the vehicle side. That we roll out to other segments, and then on the self-service credit side, about 80% of our, Capric banking clients we use machine learning with a 99% accuracy.
We will launch very early in the new year, we'll launch people to have self-service credits, so you can go on your app and you actually can get your credit for free, enough for free, but you can get it automatically. So you don't need to call, call capital or you don't need to go to a branch. And I think the other area is your end to end science service. I think you're making a big mistake. If you're just looking at product specific, you launch a product and say, that is unique.
You need to look at your end to end client experience in branch on your digital side as well as on your call centers. So that is a very focus for us, going forward. And then the people side, I've spoken about flexibility and multi skilling micro jobbing, I believe, is going to be very, very important. So there is going to be a completely new way of of work and where we need to challenge ourselves is how do you motivate your people to work completely different? How is a massive opportunity to develop people?
Because a person can work in this department this week in another department the next week, getting different skills. And I think the most important thing is how do you lead the people, in this new way of work? How do you inspire the people? How do you motivate the people? So that's where our focus is, is to make sit and we do that.
We've we innovate, we're still investing heavily in data science and data architects. We've got agreements with the University Salenbosch and UCT, where we've made a ZAR20 1,000,000 investment to make certain we've got the right people and the right skills going forward. And the the nice thing is about skills now is it doesn't matter where you sit, you can still work for us. We had our first where a person decided to move abroad, but he's still working for ourself. So it opens up the whole job market So it's going to be very interesting to see how you move in this area.
And I think I believe there's a lot of opportunities. And then Lake, lastly, is on delivery side. If you want to deliver on your client needs, on your people side, I think there's only 2 words that stands out, it's to deliver in an agile manner very, very quickly, very fast, because, the world has changed and has changed dramatically, offset that if I look at COVID, why did COVID forced us to make massive changes? Why were we not agile and ahead and change South Africa and the world and the white lines operate, much quicker. So I think that's the challenge for leadership, going forward.
How do you stay and understand what your client needs is, 5 to 10 years from from now and to be agile, and quick. Thank you very much.
Right. So the first question this morning is, Capitec has 14,600,000 active customers. Stats SA published 14,100,000 employed people. What percentage of our clients are unemployed or in the informal sector?
Well, yes, that's very difficult to determine. If you look at our quality banking clients, we're saying to yourself that there's 3,800,000 quality clients, remember the definition that I've given. And you're sitting with 5,500,000 clients that is saving and saving on a permanent basis. And you've got 1,100,000 clients, that's credit lines. So there is, I'll probably estimate there's a good 6,000,000, 7,000,000 clients that's in normal market, all, like I said, mentioned, social grants.
The money is coming in, the 350 rand gets paid in and then get withdrawn immediately. So I think if we look at our client base, if we look at it from income, if I look at it from, age, it basically represent, South Africa.
Right. And then the only other question that we currently have is, you mentioned there was a spike in funeral policy debt claim. During June July, but that we saw the opposite on the credit side. If you could just perhaps explain that or or be more clear, Well,
I can't actually explain it, because you had thought that dev claims overall will follow the same pattern. But on the funeral side, you've got 1,000,000 client on funeral, you've got 1,100,000 clients on credit. I don't know if it's a risk profile, but I'm clear, you apply a risk, writing on the clients and funeral, it's across the board, but it was just interesting for us to see that we saw a spike, on funeral, in the July August figures and then coming back and the opposite on on on credit. I think one needs to to wait and see what happens. But yeah, I think it's one of those things that we still need to understand.
We don't have any other further questions at this stage.
There's no further questions, then we close the session. Thank you very much.