A London-based private equity company has partnered with a financial technology company — fintech — based in Mauritius to help expand unsecured loans and other banking services in Zimbabwe and other parts of sub-Saharan Africa.
TLG Capital made a $25 million USD deal with GetBucks Ltd. to expand into new areas and provide banking services to the unbanked, NewsDay reports.
London-based TLG Capital invests in consumer-driven companies in frontier markets, especially in sub-Saharan Africa. The company was started with initial funding of $25 million USD from Kuwaiti investors.
Mauritius-based GetBucks describes itself as a fintech company that embraces technology as a way of providing financial products and services to customers.
“Fintech is an emerging sector within the financial markets aiming to change the world of modern banking through disruptive consumer technology….unsecured credit, basic insurance products, low cost banking and remittances,” according to the GetBucks website.
In his Financial Services Club blog, Chris Skinner describes fintech this way: “This is a new emergent market of digital finance that will, over time, displace the traditional financial markets.”
GetBucks owns 55 percent of GetBucks Zimbabwe, and the investment will allow GetBucks to deliver and expand products and services including micro-insurance and banking, NewsDay reports.
Sub-Saharan Africa has the lowest banking penetration rate in the world at 16.6 percent compared to 63.5 in the developed countries, according to the African Development Bank, NewsDay reports.
TLG founder Zain Latif told NewsDay his company carefully monitored fintech and consumer financing for several years before making this inaugural investment.
“In GetBucks we have found the right local partner with the right combination of people, experience and technology,” Latif told NewsDay. “The key to success in this industry is building a sustainable and scalable platform from which to best serve the needs of the base consumer.”
Dave van Niekerk is CEO of GetBucks, GetBucks. Founded in 2011, the company operates in South Africa, Zimbabwe, Malawi, Botswana and Kenya.
GetBucks Zimbabwe had $7.3 million in loans and 12,000 customers by mid 2014, up from $2 million in loans and 4,400 customers a year earlier, NewsDay reports.
“TLG shares our vision of changing how access to financial services is perceived and delivered to the market,” van Niekerk said.