Bank Zero Enters South African Market Seeking Pandemic Rebound
(Bloomberg) -- South Africa’s latest mutual bank has opened for business to individual clients and companies as the nation develops plans to spur a recovery from the economic damage wrought by the Covid-19 pandemic.
Bank Zero, which has been in development for the last three years, is launching with little marketing and hoping to attract customers that have already indicated interest. Its mobile app offers accounts for retail and business customers, including the informal sector. It does not extend credit and will compete with South Africa’s traditional and challenger banks.
“The smaller banks don’t cater for such a wide target market and typically have a narrow focus like just the high- or low-income groups,” Bank Zero Chief Executive Officer Yatin Narsai said Tuesday. “We’re targeting individuals in all income groups and businesses.”
The bank is one of the last to begin operating among a cohort of newly-licensed entrants to the market in recent years, including African Rainbow Capital Investments Ltd.’s TymeBank and Discovery Ltd.’s Discovery Bank. Its zero-fee offering is also going toe to toe with similar accounts launched by South Africa’s biggest and oldest lenders in response to fresh competition.
Read More: Bank Zero Readies Challenge to South Africa’s Biggest Lenders
While it has got off to a later start, having faced delays mainly related to the pandemic, it is joining the market in time to take advantage of a push by the government and private sector to shore up small- and medium-sized businesses, said Nolwandle Mthombeni, a banks analyst at Intellidex.
“There is an opportunity to service the SME market now,” she said. “They need a lot of help after the pandemic, are big employers, and government will be pushing to allocate more to the sector.”
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