South Africa’s fastest growing digital bank TymeBank, is set to acquire award-winning fintech company Retail Capital, as one of its key initiatives to bolster its business banking offering.
Retail Capital provides funding to small and medium-sized businesses in South Africa.
According to a statement, the acquisition, which is subject to regulatory approvals, would see Retail Capital become a division of TymeBank and the foundation of the bank’s expanded business banking offering.
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The deal would see Retail Capital’s funding expertise and TymeBank’s deposit base and operations combined to serve a broader customer base.
TymeBank believes being able to channel funding efficiently to business owners in South Africa is critical to the expansion of the historically underserved small business sector.
TymeBank CEO Coen Jonker said, “This acquisition will enable TymeBank to expand its offering to entrepreneurs to include working capital finance. Retail Capital has acquired significant risk management experience over the past decade and through different economic cycles. They have an experienced team in place and their risk models and operational processes have been battle-tested and optimised to a significant degree for small-business funding.”
The two entities have much to offer added the statement. TymeBank’s current Business Banking offering, which already has over 100 000 customers, includes a transactional business account that can be opened in under five minutes, zero monthly bank fees, free debit card and online purchase transactions and free bulk payments, among other benefits.
Retail Capital lowers the barriers to funding for SMEs through an easy, three-step online application process. In the last 10 years Retail Capital has already provided more than 43 000 business owners in South Africa with over R5.5 billion in working capital, making it the largest SME funder of its kind in the sector.
The two businesses are also economically complementary and synergistic. Retail Capital’s product offering to small businesses requires a flexible source of low-cost capital, which TymeBank’s deposit base can provide.
Tyme Group, through its multi-country digital banking presence, will also enable Retail Capital’s international expansion into other markets.