TymeBank, backed by business magnate Patrice Motsepe, has received the greenlight from competition authorities to acquire small businesses financier Retail Capital.
The deal, first announced in August, was approved without conditions by the Competition Tribunal, clearing a major hurdle to its conclusion.
The deal would see Retail Capital become a division of TymeBank and the foundation of the bank’s expanded business banking offering.
TymeBank is controlled by Motsepe’s African Rainbow Capital.
“They [Retail Capital] 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,” said TymeBank CEO Coen Jonker.
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 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.
“Retail Capital has a long history of supporting SMEs by enabling them to access affordable funding that helps their businesses to grow. Now, through this acquisition by TymeBank, we will be able to scale the offering, giving SMEs the opportunity to expand through funding that works on their terms,” said Retail Capital CEO Karl Westvig.
The battle for market share in lending to the small and medium enterprises (SME) market has been heating up in recent years. Old Mutual announced in August that it had bought a minority stake in Preference Capital, a specialist provider of funding solutions to the SME market.
In May, African Bank also entered the business banking sector with the acquisition of Grindrod Bank. African Bank said at the time that Grindrod Bank will provide an entry into the business banking market, which will be grown off African Bank’s strong capital levels.
Capitec is also playing in the business banking space after it purchased Mercantile three years ago in a deal worth R3.5-billion.
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