SOUTH AFRICA – One of South Africa’s big five banks First National Bank (FNB), has acquired fintech firm Selpal for an undisclosed amount.
In a press statement, FNB said the purchase aligns with its commitment to increase the level of financial inclusion in South Africa.
“Community-based businesses have an important role to play in driving economic activity and creating employment opportunities in townships and rural areas in South Africa,” said FNB CEO Jacques Celliers.
“As the banking sector, we can help facilitate this by accelerating financial inclusion through tailored financial services to elevate and develop these businesses. Given the nature and environment in which the businesses operate, this market has traditionally been classified as ‘informal’ because it predominantly operates in cash – which in turn undermined the sophistication, scale, and potential of such community-based businesses.
“We aim to bridge this gap by continuing to enable community-based businesses easy access to banking practices and money management solutions to help them realise their goals. This will be achieved by unlocking several benefits such as increased access to electronic payments, funding (working capital), access to suppliers and customers, amongst others,” notes Celliers.
Founded in 2013, Selpal’s business model entails creating a network of point-of-sale devices in the informal sector and leveraging this network for different business propositions.
Its ecosystem connects store traders to customers and suppliers.
In terms of the acquisition, FNB will leverage its collective current cash handling infrastructure to enable Selpal to facilitate payments between stakeholders in the supply chain, read the statement.
Furthermore, this is expected to solve the challenge of security and convenience for all participants along the supply chain.
“As the banking sector, we can help facilitate this by accelerating financial inclusion through tailored financial services to elevate and develop these businesses”Jacques Celliers – CEO, First National Bank
Gordon Little, FNB Business CEO, said: “As part of our broader strategy, we are dedicated to help support small businesses that are predominantly cash-based and operate in a less formal manner. Our latest acquisition and integration of Selpal complements the significant milestones we have reached in executing on this strategy.
“Selpal already has a footprint supported by an integrated system that connects informal retailers such as spaza shops with fast-moving consumer goods (FMCG) suppliers, wholesalers and manufacturers. Their user-centric digital platform was designed and built using direct observations, engagements and understanding of the pain-points that various users experience along the entire FMCG supply chain in the informal sector, from manufacturer to consumer.”
According to Little, data and insights gathered through the devices will be highly instrumental in helping the bank develop more relevant products and solutions in the near future for the informal sector.
“This will further enable us to make better informed credit and product decisions, making it easier to facilitate lending through the ability to measure performance, track and gather information on the business’s activity over a reasonable time period. As our knowledge and understanding of this market matures, we will be able to provide more value to these valuable small businesses in future,” he adds.
“Ultimately, we aim to deliver financial services in a similar style to the FMCG supply chain – a market that most merchants understand extremely well. If community-based businesses can see the value in what we are offering, we are confident they will make use of our products and services, and in turn, help increase the level of financial inclusion,” said Little.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE