Corporate law firm Bowmans has told its stakeholders the Competition Commission is likely to undertake an inquiry into banks’ lending practices to small businesses owned by historically disadvantaged persons.
The firm said that was one of three challenges the banking sector could face, with a long-running investigation by the antitrust regulator into practices relating to the prime lending rate. The third issue is curbs on interest charged on credit card debt in the wake of US President Trump’s criticism of the fees.
Bowmans said banks should be aware of “either a market inquiry or a move towards one in South Africa, focused on lending practices to SMMEs [small, medium and micro enterprises] and firms owned or controlled by historically disadvantaged persons”.
The firm said the topic received substantial interest at the commission’s Annual Competition Law Economics & Policy Conference in September.
South Africa’s biggest banks were summoned to a joint meeting of parliamentary committees a year ago to explain their lending practices, particularly concerning credit access for small businesses and economic transformation.
According to the most recent Banking Association of South Africa annual report, SME retail lending by banks surpassed R274bn in January 2025.
Competition Commission spokesperson Siyabulela Makunga said such an inquiry is in the works, adding that the regulator will focus its energy on an inquiry into the poultry sector for now.
“The commission has also taken a decision to undertake a market inquiry in the franchising sector, which will focus largely on challenges faced by SMMEs and historically disadvantaged persons in franchising, including barriers caused by lending practices or lack of access to funding,” Makunga said.
“These are market inquiries that are in the pipeline. Due to capacity constraints, the commission can only undertake one market in the 2026/27 financial year. This is the poultry market inquiry.
“While the commission has not issued any terms of reference for a market inquiry focusing exclusively on lending practices, the commission generally considers barriers faced by SMMEs and historically disadvantaged persons in all market inquiries, including barriers relating to access to funding. Where appropriate, the commission makes recommendations to address such barriers.”
Consolidation afoot
Bowmans also weighed in on consolidation between traditional banking institutions and financial technology firms, saying it is likely to filter through to other markets in Sub-Saharan Africa, with Kenya the likely next stop.
“On the mergers & acquisitions trail, we anticipate well-capitalised banks making strategic plays for rivals’ operations in other jurisdictions … [such as] Absa’s acquisition of Standard Chartered Bank in Uganda and First National Bank’s acquisition of Standard Chartered Bank in Zambia,” the firm said.
“Indeed, Nedbank’s proposed acquisition of NCBA in Kenya was announced during the preparation of this bulletin.”
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