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Why Would They Buy A Bank?

Big changes are coming to digital bank Bank Zero.

Bank Zero is in the process of being absorbed into Lesaka Technologies, a large fintech group listed on the JSE and Nasdaq.

The deal, which is for about $64 Million, is now almost done. There are just a few more hoops to jump through, but once finalised, Bank Zero will become a core part of Lesaka’s future plans.

Who Are Lesaka?

Lesaka Technologies are a financial technology company.

Lesaka already lends money to consumers and businesses, but it currently funds those loans by borrowing from traditional banks.

A fintech company is a business that uses technology to deliver financial services in a faster, cheaper, or simpler way than traditional banks usually do.

Instead of relying on branches and paperwork, fintech companies use apps, software, data, and digital systems to help people and businesses do things like:

    • Pay and receive money

    • Borrow money

    • Manage accounts

    • Accept card or mobile payments

    • Track spending or cash flow

Bringing Bank Zero into the group changes where the company has to get funding and finance from. Instead of relying on bank loans, Lesaka would now legally be able to use customer deposits to fund lending, which is much cheaper and more efficient.

How much cheaper?

Well, they are spending around $64 Million to buy the bank. So, it has to be significant.

‘Lesaka would be able to use customer deposits to fund lending’

This move could also make it easier for the group to offer bundled services like banking, payments, lending, and business tools under one umbrella.

For local banking in South Africa, this move just shows how quickly the lines between banks and fintech companies are blurring these days.

Bank Zero gives Lesaka a banking licence and modern digital infrastructure, while Lesaka gives Bank Zero scale, customers, and data.