African Bank will soon launch its digital lending business, which will leverage emerging technologies to offer and manage loans remotely for small and medium enterprises (SMEs).
This was announced by Zweli Manyathi, CEO of business and commercial at African Bank, speaking during a virtual call last week, following the release of African Bank’s interim financial results for the six months ending 31 March.
African Bank has grown to 6.1 million active customers across its digital platforms, reflecting a positive growth trend, as it expands its reach and services in preparation for its initial public offering (IPO), he noted.
According to Manyathi, the bank's growth is attributed to its “accelerate” strategy, which focuses on diversifying its services and expanding into new markets.
It is setting up a new unit to focus on digital lending for its more than 21 000 business customers across its investments and loans portfolio.
The new business will streamline the entire lending process, through tools for credit assessment, loan approval,to disbursement and recovery, he said.
“I'm very excited to talk about our digital lending business, as well as the integration of businesses that we have acquired.
“We are building a digital lending business that is going to assist us to deploy working capital in the SME space. We will deploy a minimum of R20 000, all the way to R5 million − maximum. We are in production and I'm glad to say our digital lending business has met all the regulatory requirements. We are launching in the third quarter.
“We will traverse the journey of getting finance to businesses in a manner that is very fast − within 24 hours of applying, using a paperless application system. We are now in the first phase of digitising all our credit processes, production, efficiencies and customer service benefits.”
Automating its credit processes will benefit customers by ensuring that at any stage, they are able to track the progress of their loan application, he added.
African Bank is 50% owned by the South African Reserve Bank, with the Government Employees Pension Fund owning 25%.A consortium of five South African banks holds the other 25% on a pro-rata basis: Capitec (1%), Investec (2%), Nedbank (4%), Absa Trading and Investment (5%), Standard Bank (6%) and FirstRand (7%).
African Bank CEO Kennedy Bungane explained the bank’s technology and digital transformation strategy is focused on integrating new technologies, leveraging real-time analytics and artificial intelligence, premised on digital inclusivity driving access through channels of choice.
The bank has moved 67% of its customers onto its digital platforms and telephony services, he noted.
“The launch of our digital lending platform for SMEs is one of the most exciting milestones on the horizon. It reflects our commitment to supporting entrepreneurship and job creation in South Africa’s vital small business sector.
“Our focus is on growing our secured lending offerings in personal, and business and commercial banking, while continuing to enhance our transactional banking capabilities. Our alliance model will remain a strategic differentiator, enabling us to extend our market reach and drive product innovation at scale.”
Beyond product expansion, the bank continues to invest in compliance, cyber security and operational resilience, he added.
According to Bungane, through its IPO, customers will participate directly in the future growth and prosperity of the bank.
“We have completed the first phase of the pre-IPO, with the successful launch of our employee share ownership scheme, iKamva Lethu. Through this initiative, 10% of African Bank shares have been allocated to our employees.
“Work is also well underway on the next phase of our pre-IPO journey, which includes the finalisation of a management share scheme, and the creation of retail BEE scheme, following the decision of the Government Employees Pension Fund to be a long-term shareholder beyond the IPO of the bank. These efforts will culminate in our eventual listing, targeted for post the release of our FY27 results − market conditions permitting.”
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