Major South African bank backs European online lender

By Ryan Weeks on Monday 27 March 2017

Alternative LendingDigital Banking

Capitec Bank to invest up to €21 million in Creamfinance Series B.

Capitec Bank to invest up to €21 million in Creamfinance Series B. 

Capitec Bank, one of the leading players in the South African micro lending market, has announced an investment of up to €21m in Creamfinance. The bank will acquire up to 40 per cent in Creamfinance, with the money coming in three tranches.

The first tranche of €6.7m will give Capitec an interest of 19.43 per cent in the company, the second (€7.1m) will take that shareholding to 31.25 per cent, and the third tranche (€7.2m) will complete the deal. Existing Creamfinance shareholders will have the chance to sell a further 9 per cent stake in the company to Capitec at a maximum cost of €5.4 million, which would increase the banks stake to 49 per cent.

Creamfinance is an online consumer lending platform with a presence across six global markets: Poland, Latvia, Georgia, the Czech Republicm, Mexico and Denmark. The technology oriented company uses advanced scoring methods and machine learning to assess loan applications, offering seamless access to credit.

The funds will be used to accelerate Creamfinance’s international expansion, as well as to expand its product sets in existing markets. Capitec said in a statement that it has been looking for a suitable opportunity for expanding internationally for some time. It said that Creamfinance was a good cultural fit due to its technology-driven approach, its focus on simplicity and its prioritisation of resources and capital.

“We are impressed by Creamfinance’s focus on Smart Data scoring and its business model which was developed in such a way that new countries can be entered swiftly and efficiently, requiring limited investment in local infrastructure,” said Gerrie Fourie, CEO of Capitec.

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