South African upstart bank teams up with JG Summit to expand into Philippines

South African digital bank Tyme has raised $110 million in private capital and linked up with JG Summit, one of the biggest conglomerates in the Philippines, to apply for a local digital bank license, a top Tyme executive told Reuters.

Tyme, majority-owned by South African billionaire Patrice Motsepe, will use most of the money, mainly from private equity fund Apis Partners, to expand TymeBank in South Africa, Coen Jonker, co-founder and executive chairman of Tyme said.

The proceeds will also finance the Philippine venture, said Jonker, a former senior executive of Commonwealth Bank of Australia. JG Summit also participated in the Tyme funding.

“We believe that the future of digital banking in emerging markets is multi-country, to actually build a banking group where there is enough critical mass of customers,” Jonker said in an interview on Monday, February 22.

Across Asia, regulators are opening up banking to digital players, encouraged by a boom in mobile connectivity and the prospect of tech firms offering low-cost financing services. The COVID-19 pandemic has increased the need for digital transactions.

In the Philippines, the central bank last November approved rules allowing the creation and licensing of digital banks. Last December, Singapore gave out 4 digital banking licenses.

“For us, Philippines represents the best fit in terms of our business and operating model to expand, and JG Summit the best partner in terms of the retail capacity that they have and their loyalty programs,” said Jonker.

In South Africa, TymeBank customers can set up accounts and get a debit card at more than 700 automated kiosks in Boxer supermarkets, owned by one of the country’s largest chains Pick n Pay, where account holders can benefit from the stores’ rewards program. This is in addition to the mobile app.

TymeBank has already attracted 2.8 million customers in South Africa since its launch two years ago.

Tyme is now looking to replicate part of that strategy in the Philippines, where it can piggyback on JG Summit’s retail reach in shopping malls, grocery, and pharmacy stores. JG Summit’s other interests include food manufacturing, real estate, and hotels.

This month, Jonker relocated from Hong Kong to Singapore where Tyme is setting up its global business strategy team.

After the new funding, the stake of Motsepe’s investment vehicle African Rainbow Capital will reduce slightly in Tyme but it will remain the biggest investor.

Jonker said Tyme was also looking to apply for a digital banking license in Malaysia, where the regulator has issued a policy framework for online-only banks and plans to issue up to 5 licenses.

“We are in the final stages of closing in on an exclusive partnership with a consortium,” said Coen. – Rappler.com