(Bloomberg) -- South African President Cyril Ramaphosa signed a law that will enable the government-owned Postbank to become a fully fledged state-owned commercial lender.

The legislation brings the ruling African National Congress a step closer to fulfilling an election-campaign pledge to use a state-owned bank to reduce inequality by increasing access to credit and banking services. 

“This historical development has the capacity to change the entire financial sector in South Africa as we know it,” Communications and Digital Technologies Minister Mondli Gungubele said in a statement on Friday. The “majority of our people do not have access to major services that are provided for by the banks due to their financial status and the exorbitant charges that come with such services.”

Gungubele will soon apply to register a bank controlling company in accordance with South Africa’s Banks Act and obtain a license as required by the South African Reserve Bank.     

Postbank has until now confined itself to taking deposits. The government also owns the Land & Agricultural Development Bank of South Africa, which mainly lends to farmers.

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