RainFin And Rise Africa Announce Partnership That Scales Their Fintech Innovation Into The ABSA Banking PropositionFeb 16, 2016 Blog RainFin , SME
South Africa’s Leading Credit Marketplace Announce Partnership with ABSA
SMEs given access to working capital loans within 48hrs at pricing equivalent to traditional banks
Cape Town, 16th February 2016: RainFin.com, a Fintech innovator and South Africa’s first and leading credit marketplace, today announced a strategic partnership with Absa, a member of Barclays Africa. The partnership will see ABSA incorporate the RainFin offering – of which Barclays Africa Group Limited is a 49% equity holder – into its suite of products, effectively offering SMEs unsecured competitively priced working capital term loans within 48 hours after application.
Sean Emery, RainFin CEO says, “In so doing, it gives Absa’s business bankers the opportunity to offer clients a very efficient digital mechanism to complement their present SME customer value proposition, while RainFin can significantly scale the volumes on its credit marketplace.”
It also addresses the challenges that have traditionally faced SMEs when acquiring finance. “Accessing unsecured working capital at cost effective rates has been very challenging – especially for those in their early years of growth,” says Emery. As a consequence they often resort to higher cost alternatives such as invoice factoring and merchant cash advance services which can have effective interest rate charges of over 60% per annum.
The partnership has been accelerated by Barclay’s global innovation programme – Rise – of which RainFin is a member. “The RainFin story is a great example of Barclays’ Rise Africa mandate which is to connect, co-create and scale tomorrow’s products and services, faster and cheaper. After the initial Barclays Seeker fund investment in RainFin in 2014, spearheaded by Eugene Booysen, Chief Innovation Officer, Barclays Africa CIB, the two companies worked closely together to refine the original RainFin.com credit marketplace offering, its supporting operations, credit scoring methodology, and collections capability, to align to the regulatory framework. This enables Barclays Africa to scale the RainFin offering by making it available across its operations,” explains Paul Nel Head of Open Innovation at Barclays Africa Group.
For the past two years RainFin.com has been at the forefront of the Fintech revolution which sees disruptive start-ups use software to provide solutions to everyday financial service problems. “We have seen an increasing number of South African consumers and businesses adopt online services to overcome the past challenges of accessing financial services, especially debt products,” says Nel. “When RainFin.com launched in 2012, it entered the lending market alongside incumbent financial institutional lenders with an innovative business model i.e. connecting lenders directly with borrowers. Their objective: reduce all the costs associated with borrowing.”
By using RainFin’s online application process – the intelligent SME specific credit scorecard that reviews not only an applicant’s transactional history and financial health but also includes additional non-traditional data points such as procurement history and social media – a credit-profile for SMEs can be determined. Thereafter they can be presented to lenders on the marketplace as an attractive asset class. “This significantly reduces the effective cost of finance for SMEs, which speaks to both the value proposition of RainFin and Absa,” says Emery.
In two years RainFin has grown organically, connecting well over R1m per day of lenders and borrowers through the credit marketplace. “This has created a new financial ecosystem, something which only 18 months ago was considered highly improbable,” concludes Emery.
For more information visit www.rainfin.com.
About RainFin: RainFin is a Fintech, online lending marketplace that directly connects high-quality individual, institutional or business borrowers with lenders who compete to fund them. Based on its first two years’ performance, it attracted the interest of Barclays Africa which bought a 49% stake in its technology platform. The bank is now also an institutional investor on its platform, and through its ABSA bank brand, refers its SME clients to RainFin for funding of between R10k and R750k. RainFin is compliant with South Africa’s Banks Act, CPA, National Payment System Act, Electronic Communications Act, POPI, NCA, Financial Intelligence Centre Act, and relevant Income Tax Act. RainFin is also a Registered Financial Services (FSB 45756) and Credit Provider (NCRCP 5587). Visit www.rainfin.com for more.
About Rise Africa: In October 2015, Barclays Africa launched Rise, a physical and virtual global community that facilitates collaboration and Fintech innovation. Funded by Barclays, Rise is ideally positioned to take advantage of technology solutions that are not reliant on physical infrastructure. This is particularly relevant in the African context. It provides developing markets with an opportunity to leapfrog ageing analogue infrastructure, deployed in most developed economies, and with it the capacity to solve some of Africa’s development challenges. The ability to bring scale to new ideas has long been at the centre of the Barclays proposition. By connecting the world’s most active innovation ecosystems, Barclays is confident that Rise can assist in co-creating ground-breaking products and services with entrepreneurs from across the continent.
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