The Committee enquired why Khula could not disburse funds directly, what the identity of the proposed pilot commercial bank was and why it was selected. Khula informed the Committee that the original wholesale model only allowed that Khula would be a guarantor and leverage commercial banks to finance the poor. However, banks tended to only use these guarantees for the riskiest borrowers. So far, ABSA had been the most co- operative in assisting Khula to achieve this mandate. With regard to commercial banks, the Committee enquired whether the State should "compete" within the banking sector as it appeared that there is the intention to control certain aspects of the banks. Khula assured the Committee that it selects sustainable RFIs, which have a wide reach in rural areas, as partners. The intention is to take equity in RFIs that are progressive, self-sustainable and provide access to finance to people who are historically disadvantaged and would normally not be able to access funds. Khula also assured the Committee that it would not be competing with the private sector but would rather develop partnerships.