Corporate law firm Bowmans has alerted banking clients to the likelihood of a Competition Commission market inquiry into lending practices affecting small businesses owned by historically disadvantaged South Africans, adding to regulatory pressure already building around pricing and credit practices. The warning comes as the banking sector navigates ongoing scrutiny over the structure of the prime lending rate and potential limits on credit card interest charges, issues that together point to a tightening policy environment for financial institutions.
The anticipated inquiry is expected to focus on whether lending patterns create structural barriers for small, medium and micro enterprises and black-owned firms. According to Bowmans, the subject attracted significant attention at the Competition Commission’s annual Competition Law Economics and Policy Conference last September, signalling that access to finance and transformation in the financial sector remain central regulatory concerns. Parliamentary committees also summoned major banks last year to account for their lending behaviour, particularly regarding credit access and economic inclusion.
Industry data underline the scale of the segment under discussion. As reported by the Banking Association of South Africa, SME retail lending by banks exceeded R274bn in January 2025, reflecting both the growing importance of the small business sector and the potential systemic impact of any regulatory intervention. Analysts note that SMEs account for a substantial share of employment creation in South Africa, making credit availability a recurring theme in economic policy debates.
Bowmans also highlighted accelerating consolidation between established banks and financial technology firms, a trend it expects to spread across Sub-Saharan Africa. Recent cross-border acquisitions illustrate this shift, as institutions seek scale and digital capability in increasingly competitive markets.
According to Bloomberg, transactions such as Absa’s purchase of Standard Chartered Bank’s Ugandan operations and First National Bank’s acquisition of the lender’s Zambian business point to a broader regional strategy among South African banks, while Nedbank’s proposed acquisition of NCBA in Kenya signals continued appetite for expansion.