Sanlam and Tyme Bank launch joint venture for personal loans and credit life

Sanlam and Tyme Bank have entered into a joint venture focused on growing in South Africa's unsecured personal loans and credit life markets, the financial services and insurance and digital bank said Wednesday.

Collaboration between the two companies has been widely speculated about in the market since the acquisition by Sanlam Life in September 2024 of a 25% interest in African Rainbow Capital Financial Services Holdings, a company that holds 46% of Tyme Bank.

“The collaboration with Tyme Bank is an important component of the Sanlam credit strategy. The two companies have complementary customer bases and skillsets, promising excellent growth opportunities,” Sanlam's directors said in a statement Wednesday.

Sanlam stated that the collaboration involves Sanlam Life, Sanlam Personal Loans (SPL), and Tyme Bank. SPL, with a loan book of R5 billion as at December 31, already provides unsecured personal loans of between R5 000 and R300 000, on repayment terms of 12 months to 6 years at a fixed interest rate.

The digital Tyme Bank, launched in 2018 with more than 11 million customers already, provides personal and business banking services and unsecured personal loans in South Africa. The bank does not have branches, but aside from the internet site, it has a network of self-service kiosks, equating to 15,000 retail points across the country.

The proposed deal will entail the establishment by SPL of a registered credit provider operating company to originate and administer personal loans to customers. SPL’s existing business will be sold to this joint venture company.

Tyme Bank will acquire a 50% share in the company for R31.5 million. SPL will sell 50% of its loan book to Tyme Bank for about R400m, plus the capital value thereof. Tyme Bank will also share 50% of the credit life insurance results relating to the joint venture company loan book.

Other benefits from the joint venture include Tyme Bank’s robust infrastructure, as well as bank-grade fraud and anti-money laundering capabilities to support the credit strategy of the joint venture company. Sanlam and Tyme Bank will jointly develop a new lending capability on Tyme Bank’s infrastructure.

The joint venture will access both Sanlam and Tyme Bank’s customer bases, creating cross-sell opportunities.

Last week, Sanlam announced a strong start to its new financial year, with earnings, excluding investment return on shareholder funds, increasing by 15% for the three months to March 31, while net operational earnings, including investment returns on shareholder funds, increased by 22%. New business volumes were up by 15%.

Sanlam’s share price fell 0.15% to R85.67 on the JSE, early Wednesday morning.

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