Pan-African private equity firm - Actis is set to acquirea 60 per cent stake in South African credit bureau – Compuscan, as it moves to build a sizeable emerging markets business in the financial services industry.
The deal, according to a statement issued by the Credit Services Holdings (CSH), the holding company for Compuscan on Monday, will see Actis get portion of Compuscan’s credit bureau businesses in South Africa, Uganda, Namibia, Botswana and Lesotho.
Compuscan’s founder Remo Lenisa said in a statement that the deal presents major growth opportunities for the firm, whose specialty is in providing a range of credit management data services to provide a holistic view of consumer and business information.
“We understand the immense value of quality data to the credit industry and the economy as a whole and have developed innovative applications to enable us to provide real-time access to accurate credit information, combined with technologies that support the implementation of best credit granting principles,” Mr Lenisa said.
Mr Ali Mazanderani, the Actis Africa Financial Services Lead said: “There is huge potential in the emerging market credit services industry. Credit bureaus have the potential to reduce loan interest rates and decrease the number of non-performing loans, while increasing financial access, credit expansion and ultimately economic growth.”
Without credit data on potential borrowers, banks are more reluctant to lend to them because they are unable to accurately price loans, which are priced basing on an individual borrower’s credit risk.
Compuscan has over 3,500 clients across Africa including banks, telecoms, retailers, microcredit institutions and insurers. It is said that it generates more than 75 per cent of its profit from its South African business, 20 per cent from Uganda while the remaining 5 per cent comes from Namibia, Botswana and Ethiopia.