Sasfin and Hello Paisa partner to launch bank in South Africa this year

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Sasfin Holdings Limited, a bank-controlling company that listed on the Johannesburg Stock Exchange in 1987, and Hello Paisa, a money transfer service, will launch a bank in South Africa this year.

The companies noted that the aim of the partnership is to bring thousands of people into the financial system for the first time. The new bank will use Sasfin’s licence and infrastructure and Hello Paisa’s distribution network and technology.

The Managing Director of Hello Paisa, Ahmed Cassim 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’ products.

Cassim said “we spoke to these customers and it was crystal clear they were underserved and they needed banking solutions”. He noted that about 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 aren’t properly served by the financial system offer a big potential source of growth for both new players and South Africa’s 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.

The Chief Executive Officer of Sasfin, 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. He revealed that Hello Paisa is better positioned to serve the millions of people not supported by the financial system.

Hello Paisa and Sasfin noted that 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.

Sassoon said the bank’s fees will be low. He also pointed out that 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.

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