S.Africa's Sasfin, Hello Paisa launch bank for thousands without accounts
JOHANNESBURG, March 6 (Reuters) - Banking group Sasfin
and money transfer service Hello Paisa will launch a
bank in South Africa this year, hoping to bring thousands of
people into the financial system for the first time, the firms
said on Wednesday.
The new bank, one of a host of start-ups in the sector this
year, will use Sasfin's licence and infrastructure and Hello
Paisa's distribution network and technology.
Ahmed Cassim, managing director of Hello Paisa, told Reuters
the bank expects to attract tens of thousands of customers in
its first year, leveraging an existing base of 1.4 million
people already using either Hello Paisa or its sister firms'
"We spoke to these customers and it was crystal clear they
were underserved and they needed banking solutions," Cassim
said, adding 200 members of staff were working in places like
informal settlements every day to promote the bank and help
people use it.
The millions of people who arenít properly served by the
financial system offer a big potential source of growth for both
new players and South Africaís big four, FirstRand,
Absa, Nedbank and Standard Bank.
Fellow start-up banks like TymeBank, backed by billionaire
Patrice Motsepe, hope to attract them with slick technology, low
fees and simplicity.
Others, including Discovery Bank, a unit of insurer
Discovery and Bank Zero, have their sights set on
higher-income or business banking customers respectively.
Sasfin CEO Michael Sassoon said banking can be intimidating
for some South Africans, but Hello Paisa's network of outlets
and field agents would educate people and win their trust.
That leaves Hello Paisa "far better positioned" to serve
that segment of the market than rivals, he said.
The bank's customers will be able to open an account in
minutes, and will be offered a mobile app, mobile sim card and
visa debt card, the companies said.
Fees will be low, Sassoon continued, and the bank will look
at offering credit and other products like insurance, leveraging
the data it has on customers.
He added that such products could be offered by third
parties, in line with a model being introduced in Europe and
elsewhere that forces lenders to open up customer data to rivals
and encourages such partnerships.
Cassim said while the bank will be loss-making in the short
term, it has multiple products to leverage allowing it to get to
break-even and profitability quicker, although he declined to
give a timeframe.
(Reporting by Emma Rumney; Editing by Elaine Hardcastle)
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