Barclays Africa Group Limited (Barclays Africa) has acquired a 49% stake in RainFin, South Africa’s leading peer-to-peer marketplace, in a move that is set to give a major boost to the emerging sector of lending exchanges and social lending in South Africa.
According to Sean Emery CEO: RainFin in a statement, “We are excited to announce that Barclays Africa Group Limited (Barclays Africa) has acquired a 49% stake in our business. This investment of tens of millions of rands into RainFin by one of the world’s leading financial institutions is terrific news for our lenders and borrowers alike because it gives us the working capital, credit and risk expertise, and access to liquidity in order to grow our business and improve our offerings.”
Emery says the Barclays Africa’s deal confirms that peer-to-peer lending is here to stay and the firm will use the cash to grow its customer base, bringing even more lenders and borrowers into the network, benefiting everyone who has supported us from the outset. Barclays Africa’s support will the firm to offer exciting new products in areas such as supply chain finance, enterprise development funding, fixed asset purchases and even mid-sized corporate debt and expand into new markets.
Founded in South Africa in November 2011, RainFin is an online social lending marketplace that elimantes banks by linking borrowers directly with Lenders safely, quickly and cheaply. The social lending community uses technology to allow users to borrow with conditions far better than in the traditional collateralised loan market and Lenders can experience the benefits of lower fees and better interest.
The Barclays Africa investment in RainFin follows a lot of increasing interesty in the global peer-to-peer industry from the UK and US to China and India with peer-to-peer lenders such as Lending Club and Prosper in the US enjoying triple digit growth and getting funding from venture capital firms like Sequoia Capital and BlackRock.
Worldwide hedge funds, and institutional investors all exploring ways to collaborate with peer-to-peer lenders such as City Group, Capital One, Bank of Montreal and Deutsche Bank buying up loans originated through those platforms. With institutions moving into the market, peer-to-peer loans have truly come of age. Barclays Africa will do the same to make our concept of peer-to-peer lending a mainstream finance option in South Africa.