Barclays Africa Group Limited (BAGL) has acquired a 49% stake in South African p2p lending service Rainfin. The investment amount is stated to be ‘tens of millions of rands’. Rainfin says it wants to use the money to grow the business and improve the product.
Rainfin launched in July 2012.
CEO Sean Emery on the investment of BAGL:
We have known for a while that we would need a partner to take RainFin to the next level, and chose BAGL after a loan search because it has a vision that aligns closely with ours. BAGLâ€™s support will enable us to offer exciting new products in areas such as supply chain finance, enterprise development funding, fixed asset purchases and even mid-sized corporate debt. It will also clear the way for us to expand into new markets.
The BAGL investment in RainFin comes at a time when there is a lot of movement in the global peer-to-peer industry from the UK and US to China and India. In the US, peer-to-peer lenders such as Lending Club and Prosper are enjoying triple digit growth and venture capital firms like Sequoia Capital and Blackrock are investing in the industry.
Worldwide, we see banks, hedge funds, and institutional investors all exploring ways to collaborate with peer-to-peer lenders with City Group, Capital one, Bank of Montreal and Deuce Bank buying up loans originated through those platforms. With institutions moving into the market, peer-to-peer loans have truly come of age. BAGL will do the same to make our concept of peer-to-peer lending a mainstream finance option in South Africa.
Whether youâ€™re a lender or borrower, rest assured that our main focus remains on bringing together creditworthy borrowers and smart lenders so that both parties can benefit. Our platform will remain as transparent as ever, and we will continue to put you first as we move forward into the future with our partners at BAGL.
We thank you for your early support of our business and of the early stages of peer to peer lending in South Africa. We look forward to moving into the future with you and with our new partners at BAGL.
Update: An earlier version of this article reported figures which were not up to date. Please see the comment by CEO Sean Emery for recent figures.
One thought on “Barclay’s Bank Africa Acquires 49% Stake in P2P Lending Service Rainfin”
Morning, thanks for covering the story. There seems to be an error in your figures.
These are the last published figures prior to us going into closed period with Barclays Africa.
Value of loans applications in Public Marketplace: R21 561 891
Number of loan applications in public marketplace: 1,263
Value of loans funded in Public MarketPlace: R1 371 911
Rainfin said that less than 8% of loan applications received for the public marketplace passed RainFins moderation, and the 55 loans which passed moderation to enter the public marketplace, 80% receive some portion if not all of the funding they requested from unknown lenders.
Value of loans applications in Private Friend to Friend MarketPlace: R7 873 019
Number of loan applications in Private Friend to Friend marketplace: 125
Successful loan applications funded in Private Friend to Friend marketplace: R2 301 017
Of the 125 loans in the private friend to friend marketplace 95% receive some portion if not all of the funding they requested from their know lenders
Total Value of loans funded across both environments: R 3 672 928
Median Loan Value: R19,663.64
Median Interest Rate funding received: 13.20%
Number of loans moderated by the RainFin not suitable to be placed in Public marketplace: 1208
Number of lenders in public marketplace: 22
One lender is a wholesale funder who has over 60% of loans (they are in essence kickstarting the marketplace)
Average return excluding the wholesale lender and after bad debt 10.2% (average bad debt 4%)
Number of lenders in Private Friend to Friend marketplace 85
Average return of Private Loans in friend to friend marketplace 12.5% (average bad debt 1%)
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