Like many enterprising types in their mid-30s, Gerhardus Metselaar (Gerrie) Fourie was itching to do his own thing, to be part of something fresh and exciting.
He had spent a decade and a half in the liquor trade, and climbed quickly, heading up the populous northern provinces for the Stellenbosch Farmers’ Winery (SFW) by age 32. He knew how to distribute and flog cider and wine and cane and brandy. Savanah, he remembers, just would not sell. That was until a barman in the Waterfront stuck a slice of lemon down the neck; after that it flew out the warehouses.
Steadily climbing the corporate ladder was, like that cider, palatable, but oh so dry. Fourie had the thirst to build something. There was, however, a compelling reason for him to hold onto his salary and his medical aid at SFW. This was back in 2000 and his wife Reinie was suffering from the auto-immune disease lupus. Chances were that she would need a kidney transplant. Changing jobs meant an obligatory cooling-off period before again being fully covered on his new medical aid. And the family simply could not afford to be without that safety net for any stretch of time. Fourie assessed the risk, and it looked too high.
Michiel le Roux, however, had been convinced by an old colleague that this incredibly “smart ou” at SFW was who he needed to run the gaggle of microlenders that would soon become Capitec. Funded by Jannie Mouton’s PSG, Le Roux was herding a stampede of cash loan shops into the same kraal, where he wanted to nurture them into a no-frills bank.
By the advent of the new century, South Africa still had more than 17-million consumers stuck outside the formal financial system. And while many saw the unbanked as a charity case, the investor Mouton and the former boss of Boland Bank Le Roux saw it as a business opportunity.
But why would a banker want a brandy peddler to head up a new financial institution? Le Roux, you see, also had a background in liquor, having spent a decade at the helm of Oude Meester and Distillers Corporation.
While smart in the booze business certainly did not exclude intelligence, it was more a description of competence, ingenuity and grit. Fourie, in other words, was the guy to tackle a difficult problem.
So Le Roux made his pitch on behalf of the business: should it be needed, they would stump up for the medical procedure.
On the ground
Fourie came on board as managing director of the enterprise not yet named Capitec. There he went about the gruelling task of running the more than 100 microlenders – loan sharks as many called them – while dozens more were being acquired. The plan was to build a distribution network of some 300 shops, which would then be turned into a bank. The nationwide footprint required Fourie, from the very start, to travel from the Stellenbosch headquarters to far-flung parts of the country. What he saw convinced him that the top brass needed to be beefed up, and he told Le Roux as much.
Fortunately, the old team at Boland Bank were falling out of love with the corporate machinations in what was then the amorphous BoE Group. A handful of key executives walked out within weeks of each other. Among them were Riaan Stassen, finance chief André du Plessis and marketing legend Carl Fischer. After some deliberations, they all pitched up in Stellenbosch. Stassen took the role of MD. And just like that Fourie was out of the job he had been pulled in to do.
But he was part of the team. He slotted in as operations chief. He would be the one bringing loads of first-hand knowledge about the market back to the rest. “I usually flew somewhere on a Monday evening or Tuesday morning and came back on the Thursday evening,” he recalls.
In South Africa’s towns he could tell you exactly what was where. Taxi rank, Pep, Pick n Pay, Shoprite, all mapped out in his head. He familiarised himself with the minibus routes, got to know how the lives of prospective clients ran day to day. The bank would be built to suit them, the consumers who did not need the bells and whistles of private banking with its airport lounges and a personal relationship manager just an email away. An addressable market? Yes, says Fourie – some 95% of the population.
During his time as operations chief, Fourie’s wife went in for that kidney transplant. When Le Roux heard about it, he went to find Fourie and asked him “wat skuld ons?” – best translated as: we’re ready to honour our side of the bargain. By then the waiting period was over and the medical aid could do its part. But the gesture made a lasting impression on Fourie.
Also impressive was the way Stassen pulled the team together and focused all efforts on that singular goal of building a business that would draw millions into the financial sector.
Fourie and Stassen worked together well. They would often travel together, walk through town centres, look at sites to put up new branches. Have a bottle of wine or three, as Stassen recalls in an internal Capitec publication to commemorate the bank’s first 20 years, and then go for a run the next morning.
Fourie, you can see, is an energetic type. His blue eyes are very much alive, and behind them you can sense a machine running at full tilt. Anyone who’s interviewed him over the years will tell you he does that very rare thing for an executive: he answers your questions. He does not have to “prep” for a chat – forget flashcards and talking points – he knows the business inside out.
His tan, however, reveals that this exec does not spend all his time in airconditioned boardrooms and thick-carpeted offices. In fact, he claims to have signed off the opening of Capitec’s first 600-650 branches himself, after doing his own on-the-ground due diligence. That’s footwork for you.
The best description of Fourie: he’s the type that went to Grey College, but did not tell you about it himself. He studied in Stellenbosch, but does not use it as an identifier. He’s his own man. Motivated more by applying relevant experiences to the puzzle he is trying to solve than by reminiscing.
Picking up the pace
Fourie ended up spending 14 years as Capitec operations chief. Only at the start of 2014 did he take his seat in the CEO’s chair, with Stassen retiring and joining the board.
The business Fourie took charge of had 5.4-million clients, made a net profit of R2bn, still earned more than four times as much from unsecured lending than the rest, and the share price was about R200.
Plain sailing? No way. Rough seas. Turbulence. Choose your metaphor. Only a few weeks in, the platinum industry went on a five-month strike. African Bank went into curatorship later that year. Three years later dodgy accounting at Steinhoff International tanked its share price and soon after a damning report by Viceroy painted Capitec with a similar brush.
Fourie came out as a case study in how to handle a crisis. Again, talking straight, answering questions head-on about the business he knew from the ground up.
Eleven years later, the client number is above 24-million – more than half of them on the banking app and nearly 9-million using Capitec as their primary bank. Unsecured lending is still important, but non-interest income now accounts for more than two-thirds of what the company pockets. And the share price, yes, hovers around R3,400.
What a performance! But Fourie himself will tell you that the foundation he could build upon was strong. Capitec had taken its time to suss out both clients and competition. Data was a resource this institution used like a runner does fresh air. And with full lungs Fourie and his team then picked up the pace.
Not long after Fourie took the reins, the bank started looking wider than its regular Global One Savings Account, its simple loan products and the domestic market. In 2016, it launched a credit card. The next year it invested in an East European fintech named Cream Finance, later renamed Avafin. In 2018, it waded into funeral policies. Only a year later, Fourie and his team acquired Mercantile Bank and rejigged it into Capitec’s business bank offering. By 2022 it had started a mobile virtual network – SIM cards with pre-paid talk time and data – called Capitec Connect.
Depending on your outlook, this could be seen as quite a departure from Stassen’s approach of “focus” – sticking to that savings account, resisting any temptation (demands, even, from some shareholders) to cross-sell to clients. But Fourie had a much bigger organisation to work with. And better technology.
Stepping back
Denker Capital’s Kokkie Kooyman, a veteran investor who has watched Capitec from the start, says Fourie managed to transform the bank into an “IT group”. The CEO himself calls it a data business. Semantics, but the point is: “His big contribution was his insight into technology and how it changes,” says Kooyman.
Capitec now earns a tidy R4.4bn from value-added services and its mobile virtual network. And the plan is obviously to do even more. The sheer number of engineers and data scientists Capitec now employs should be an important leading indicator. Some 750 engineers out of a full staff complement of 17,000. And remember most of those employees are in the more than 800 branches, so head office must be swarming with engineers!
This also gives you a clue as to why Capitec wants to go deeper into insurance, having launched life policies only last year. “Insurance is all about data,” says Fourie. And he has identified cover of less than R2m as a market hardly serviced at all. Much like small-time banking clients were 25 years ago not catered for by the big institutions.
But if things are this exciting, why go now?
“If you are the CEO, you need to set the pace,” says Fourie. Younger ones – more in the age bracket where he was when he joined – now need to run with the business. And a big business it is. Capitec is turning into a financial services giant, not only a big bank like the ones it stalked for so many years.
Fourie is now going on “garden leave” for a year. Then most likely taking a seat on the board.
Interestingly, when Capitec first went into funeral policies, it did not do so under its own licence but partnered with Sanlam. “They came with things like a cooling-off period of three months, but we just challenged that and said it did not make sense, this guy already has a policy, why should he now go through a cooling-off period?”
Some fresh thinking in an old industry. It was, after all, a cooling-off period that almost kept him from joining and then running the hottest business South Africa has seen this century.
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