Retail credit rating company RCS Team, owned by the French financial institution BNP Paribas, has barely had time to digest the acquisition of the significant Edcon bank loan reserve just before producing a further acquisition. It announced on Monday that it has obtained on the web payment and credit service provider Mobicred for an undisclosed amount.

RCS CEO Regan Adams claims the acquisition of Mobicred was the pure next move in the group’s electronic transformation system and enhances its current product or service supplying beautifully.

By acquiring Mobicred, RCS is in essence purchasing a whole lot of credit history-hungry on line shoppers to incorporate to its flock of RCS account holders who are even now mainly procuring in malls, although most merchants provide on the net shopping.

Scant element

However, the get-togethers to the transaction did not disclose the obtain value, nor how a lot of clientele Mobicred has or the size of its personal loan ebook. The formal announcement of the transaction and added facts only states that customers can use Mobicred to fork out at close to 4 000 on the internet outlets.

These contain some of the biggest stores in SA, these as Video game, Takealot, iStore, Amazing Connection, bidorbuy, Superbalist, Hifi Company, Sportsmans Warehouse, Dis-Chem, Clicks and Tekkie Town. Mobicred customers can essentially buy something on the net.

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RCS cards are approved in 28 000 retailers. This features most of SA’s style and clothes merchants.

RCS has 2.7 million active clientele following the acquisition of the Edcon mortgage reserve efficient from the beginning of 2020.

RCS suggests in a dialogue of the Mobicred acquisition that it is in alignment with its drive towards money inclusion in SA, while its web site claims that the group’s main function is to boost people’s life by means of innovative and available credit economical options.

“South African youth are the quickest-escalating group of on the internet buyers in the state and providing this team of electronic natives with accessibility to credit is imperative,” says Adams.

“Our acquisition of Mobicred allows us to greater serve the requirements of South African customers who need a extra varied suite of credit rating solutions to support them accessibility and deal with their buys. The acquisition of Mobicred was the natural future phase in RCS’s electronic transformation strategy and complements our current featuring completely, as we enable our consumers to change in direction of shopping throughout their picked out channels – be it in-retailer or on the web.”

Demand for credit rating is significant

Mobicred founder and CEO Jason Sive says Mobicred has developed by 70% for every annum since its get started in 2013.

“The enterprise was started on the notion that credit should really be easily obtainable in the on the net retail natural environment in the exact same way that it is readily available in the bodily keep surroundings.

“Soon immediately after launching the small business, customer conduct immediately validated the demand for substitute payment kinds and the fast advancement in our client base has assisted the small business realize 70% yr-on-yr development,” suggests Sive.

“We’ve been ready to address a substantial discomfort place for the South African industry in which the demand from customers for an different to common credit rating playing cards has greater exponentially in excess of the very last couple of yrs.”


Hunting at RCS Group’s figures exhibits that economic inclusion and enhancing people’s life by supplying credit-card style loans is remarkably rewarding. The good news is, RCS’s annual report is readily obtainable as BNP Paribas has shown quite a few corporate bonds on the JSE.

Adams says in his commentary in the yearly report for the yr to conclusion December 2020 that RCS’s e book improved to R12.7 billion at the conclude of December 2020, even though the balance sheet showed an amount of R11.6 billion. According to the accounting policies, the variation is largely owing to provisions for terrible financial debt.

The economic statements show that RCS is generally a quite worthwhile enterprise, while this was not the scenario in 2020. Dogged by lockdowns, gain soon after tax fell to R56.9 million – the result of growing provisions for negative financial debt from beneath R900 million in 2019 to R2.2 billion in 2020.

In the “normal” fiscal year to end 2019, revenue soon after tax exceeded R472 million and return on equity exceeded 15%.

The company appears simple from the outside …

BNP Paribas resources RCS by issuing company bonds and lends the funds out at higher interest prices. It attempts to preserve expenses and assets low, and tries to manage the terrible personal debt as most effective it can.

In 2020, RCS gained fascination cash flow of additional than R3 billion and compensated just fewer than R650 million in desire to bondholders and other suppliers of funding, whilst earning a different R1.2 billion in costs and other non-desire money.

Like a standard financial institution, RCS costs a regular monthly account cost and from time to time a transaction fee. Its division presenting unsecured loans also prices an initiation price. This non-desire profits addresses most of the working expenditures.

As for property, RCS has really few. The harmony sheet shows tangible belongings of only R85 million.

Pedal to the metallic

RCS believes the acquisition of Mobicred will speed up its advancement into the e-commerce ecosystem by introducing new and bespoke manufacturers to its presently properly-proven purchasing network.

“The acquisition also makes it possible for the team to faucet into new buyer segments, with a distinct aim on Gen Zs and Millennials – the greatest proponents of on-line gross sales in South Africa,” suggests Adams.

“As portion of the world wide BNP Paribas group, we are constantly hunting for ground breaking technologies to improve the shopper knowledge and to bolster our engagements. It is important to stay abreast of new fintech developments and to integrate innovation into each individual touchpoint in our enterprise.

“Our main concentrate is to carry the best of equally worlds together, marrying our actual physical shop footprint with our electronic capabilities to generate synergies within just the retail atmosphere.”

Adams adds that consumers’ finance needs will be satisfied where ever they are, possibly bodily in retailer or digitally where ever they are, day or night time.

He claims consumers will have a far more varied product or service array at their fingertips, enabling them to choose what satisfies their precise needs.

Experiments have revealed that SA is continue to far behind the relaxation of the term in phrases of on the web procuring, but the craze toward its adoption is accelerating, partly due to Covid-19, which has introduced many buyers to virtual searching malls.


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