Financial services group Sanlam has announced plans to enter into a strategic joint venture with digital banking platform TymeBank, aimed at expanding access to unsecured personal loans and enhancing the group’s retail credit offering.

The proposed partnership, subject to regulatory and shareholder approvals, will see Sanlam Life Insurance, Sanlam Personal Loans (SPL), and TymeBank jointly establish a new operating company focused on originating and administering unsecured loans ranging from R5,000 to R300,000.

These loans will include embedded credit life insurance, and be repayable over terms of 12 months to 6 years at fixed interest rates.

As part of the agreement, Sanlam will transfer its loan origination business from SPL- excluding the existing loan book – into a newly created entity (JVCo), while TymeBank will acquire a 50% stake in JVCo for R31.5 million.

TymeBank will also purchase half of SPL’s retail credit loan book, currently valued at approximately R5 billion, for a base price of R400 million plus the capital value.

Additionally, TymeBank will acquire a Reference Share that entitles it to 50% of the credit life insurance profits associated with the JVCo loan book, for a subscription price of R320 million.

Sanlam said the joint venture aligns with its broader retail credit strategy and offers several strategic benefits. These include:

• Access to a combined customer base across Sanlam and TymeBank, enabling cross-selling of financial products;
• Utilisation of TymeBank’s robust digital infrastructure, fraud detection, and compliance capabilities;
• Leveraging TymeBank’s nationwide digital footprint, including 800+ self-service kiosks and over 15,000 retail points;
• Economies of scale that will help both parties deliver competitive lending products under their respective brands.

Sanlam’s has an indirect stake in TymeBank via its 25% holding in African Rainbow Capital Financial Services, which in turn owns 46% of TymeBank.