TLG Capital, private equity firm focused on Sub-Saharan Africa, has entered into a $25 million deal with GetBucks Ltd to support the latter’s expansion in new territories and deliver services to those beyond the reach of traditional financial services.
GetBucks Ltd — a pan-African, technology-driven, microfinance company headquartered in Mauritius—has a 55% shareholding in GetBucks Zimbabwe.
The investment will also allow GetBucks to deliver new products and services including micro-insurance and banking.
The investment comes at a time Sub-Saharan Africa has recorded the lowest banking penetration rate in the world at 16,6% compared to 63,5% in the developed countries, according to the African Development Bank.
This has left a large chunk of the population unbanked, presenting opportunities for enterprising companies to explore.
TLG founder Zain Latif said it was his company’s maiden investment directly into the fintech and consumer finance space, “a sector we have been carefully monitoring for a number of years”.
“In GetBucks we have found the right local partner with the right combination of people, experience and technology. The key to success in this industry is building a sustainable and scalable platform from which to best serve the needs of the base consumer. We look forward to a long and fruitful relationship between TLG, GetBucks and the African consumer,” Latif said.
Dave van Niekerk, CEO of GetBucks, said: “The investment from TLG has given the group the springboard it needs to further grow its customer base and successfully penetrate new markets.
“TLG shares our vision of changing how access to financial services is perceived and delivered to the market, so we are very pleased to have them on board.”
TLG invests profitably with the caveat that its investments should have a socially beneficial impact.
To date TLG has made 14 investments and four exits, all above the target return.
GetBucks is a “fintech” company that embraces technology as a means to provide financial products and services to its customers.
“Fintech” is an emerging sector aiming to change the world of modern banking through disruptive consumer technology.
GetBucks was founded in 2011 and currently operates in predominantly high-growth emerging African markets within Sub-Saharan Africa, including Botswana, Kenya, Malawi, Zimbabwe and South Africa. The deal will be a boon to GetBucks Zimbabwe which has seen its loan book rising.
In the year ended June 30 2014, GetBucks Zimbabwe’s loan book stood at $7,3 million from $2 million in 2013.
Its customer base stood at over 12 000 from 4 400 in 2013.