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The announcement was made by Sasfin last Thursday (21 February). The bank did not reveal how much it had invested in the startup — which was launched by CEO Eli Michal in 2017 — or what stake it had taken in the company.
Payabill is a digital lending business that provides finance to small businesses. It does this by way of offering factoring finance — by settling with suppliers directly on behalf of its clients and allows clients to select their own extended payment terms.
Sasfin has acquired what it calls a “strategic” stake in fintech startup Payabill which provides factoring finance for small businesses
Sasfin said the collaboration between the bank and Payabill will accelerate financing opportunities for customers.
“Payabill has made huge strides in giving businesses access to digital finance and we are thrilled to announce this investment,” Sasfin CEO Michael Sassoon said in the same statement.
Michal said Sasfin will provide access to new channels and much needed funding that enable the startup to support the growth of small business finance in South Africa.
He said in the statement that he had started the fintech as he “wanted to enhance access to finance for small businesses in South Africa”.
He said traditional lenders have neglected the small business segment of the market due to the high costs associated with on-boarding and assessing these customers, as well as managing their credit risk.
“It made no sense to us that a retail consumer could get multiple forms of credit, almost instantly via electronic channels, but small businesses could not.
“They were being neglected. With this in mind, we set out to build a completely paperless, digital solution to address this market’s unique requirements,” he said.
Currently, Payabill offers loans of up to R150 000 to businesses. The intention is that with the investment made by Sasfin, Payabill will be able to offer larger loans to SMEs in the near future.
Sasfin last year launched its digital platform, B\YOND, for small and medium-sized enterprises.
The bank said it has been investing in fintechs, building digital capabilities such as B\YOND and working with third parties such as Xero Accounting for a number of years with the aim of adding value to our business and wealth clients.
Featured image: Sasfin via Youtube