Loaning in SA has been traditionally done by the various commercial banks present in the country. The reach has however not been comprehensive. According to the Banking Association of SA, over R12-billion remain unbanked in South Africa.
RainFin is entering the market when banks in South Africa are performing well; Bloomberg reports that the country’s bank loans grew to 2.5 Trillion rand as compared to last year. RainFin’s peer to peer loans although convenient might just be as complementary and with little effect to growth of SA bank loans. RainFin also counts on SA’s Internet economy worth some R59-billion by 2011 and contributing 2 percent to the South African economy. The Internet is also projected to contribute to 2.5 percent to the economy by 2016, says the World Wide Worx.
However, it is not the only firm offering social loans. Zunguz, an app on the Facebook app centre which initially offered money transfer on the giant social network recently entered the social loaning services sector by introducing 30-day loans with a partnership with GetBucks. Zunguz allows money exchange, gifts or donations on social networks among users’ friends. The Zunguz payments platform facilitates money transfer and personal loans by connecting users’ with their banks to transfer the funds although it does not handle money.
Experts speculate both applications could eventually disrupt lending in South Africa following the introduction of social money. Robert Sussman Co-founder at Zunguz told HumanIPO that ZunguZ is closely engaged with leading payment providers on a host of partnerships and other private interactions, which will be announced to the market later.
“This is where ZunguZ, with its custom-built functionality and foundation intelligence, adds measurable value to the financial graph. It has been an idea for most people – now it’s a reality for everyone,” he says.
According to RainFin’s chief executive Seam Emery, the startup is set for launch in July and will present details of its operations and their business model to the public.