TymeBank, which is owned by Patrice Motsepe’s African Rainbow Capital (ARC), is targeting SA’s unbanked population and small businesses as it looks to grow its customer base.
The digital bank launched its transactional banking offering two weeks ago and is planning a fully fledged business banking offering for small and medium enterprises (SMEs) later in 2019.
TymeBank CEO Sandile Shabalala said the group had made a strategic decision not to target the wealthy segment of the consumer market or big corporate clients.
"There’s a big job to be done in the underserved communities at the entry level of banking. We also believe there’s a bigger opportunity in this country to engage SMEs in a much more effective way," he said.
TymeBank said its target market is 21-million, of which 17-million are underserved by traditional banks.
Competition is intensifying in the entry-level market, with Capitec, whose customer base surpassed 10-million in 2018, announcing price cuts last week. African Bank is also set to launch a fully fledged transactional banking offering to this market in April.
TymeBank now has more than 80,000 transactional banking customers and about 500,000 registered money-transfer users, thanks to 500 customer on-boarding kiosks in Pick n Pay and Boxer stores across the country.
TymeBank expects to break even in 2022 if it can attract 2.1-million transactional banking customers and lend to at least 6% of that base.
"We know we need scale. We need to on-board as many customers as soon as possible and ensure they transact as much as possible," said TymeBank deputy CEO Tauriq Keraan.
TymeBank said it is going to disrupt both banking and lending in the entry-level market. The bank is planning to offer credit cards and unsecured term loans in the near future. It is going to use multiple data sources and transacting behaviour to complement credit bureau data in order to assess the risk profile of consumers who want to borrow.
The bank’s partnership with Pick n Pay will allow it to harvest data through Smart Shopper as well. "We want to bring about an experience that is beyond banking. There are some really interesting things we are working on to disrupt lending in this country for the benefit of customers," said Shabalala.
He said the bank will also collaborate with its partners and other firms in the ARC stable to bring services traditional banks do not normally offer. With SMEs, TymeBank is going to offer business accounts with a similar cost structure to that of transactional accounts. It plans to provide working capital loans as well as advances based on usual cash flows and stock small businesses hold.
"It helps us to also price the risk without asking SMEs for things they don’t have, like cash flow and financial statements."
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