Life in­surer MMI and African Bank join forces

The Star Early Edition - - COMPANIES - Siphelele Dludla

LIFE in­surer MMI Hold­ings en­tered into a mu­tu­ally ben­e­fi­cial part­ner­ship with African Bank yes­ter­day in which it would ex­tend bank­ing ser­vices to its clients by of­fer­ing loans and take de­posits.

The deal would en­able each group to lever­age each other’s strengths through of­fer­ing a wider range of prod­ucts and ser­vices. The lend­ing ven­ture would see MMI of­fer­ing needs­based credit to its cus­tomer base through its var­i­ous dis­tri­bu­tion chan­nels.

The long-term life in­surer ex­pects to build a loan book in ex­cess of R10 bil­lion in the first five years.

African Bank will be the ex­clu­sive un­se­cured credit provider for MMI clients and credit will be granted within the pa­ram­e­ters of a mu­tu­ally agreed credit pol­icy. The in­surance op­por­tu­nity will en­able African Bank to pro­vide MMI in­surance prod­ucts to its cus­tomer base through the var­i­ous African Bank dis­tri­bu­tion chan­nels. MMI will be­come the in­surance part­ner to African Bank on an ex­clu­sive ba­sis. The third ven­ture will in­volve the pro­vi­sion of trans­ac­tional bank­ing ca­pa­bil­i­ties to en­able the MMI value propo­si­tion.

This part­ner­ship be­tween African Bank and MMI is an ex­ten­sion of an al­ready ex­ist­ing re­la­tion­ship with MMI’s wholly-owned sub­sidiary Guardrisk. Guardrisk cur­rently un­der­writes the African Bank’s credit life in­surance, in­sur­ing African Bank’s risk ex­po­sures through a cell cap­tive struc­ture.

African Bank chief ex­ec­u­tive, Brian Ri­ley, said they were de­lighted to have con­cluded this part­ner­ship with MMI.

“The part­ner­ship will en­able the bank to en­hance the value of­fered to our cus­tomers and it will broaden our reach into a new cus­tomer base,” Ri­ley said.

African Bank was res­cued and re­cap­i­talised by the South African Re­serve Bank af­ter its par­ent, African Bank In­vest­ments Lim­ited, col­lapsed in 2014 be­cause of un­se­cured loans. MMI chief ex­ec­u­tive, Ni­co­laas Kruger, said the part­ner­ship with African Bank ex­tended their prod­uct of­fer­ing to in­clude bank­ing ser­vices to their clients. “We are also ex­cited to be ex­tend­ing our fi­nan­cial well­ness of­fer­ing to more than 1.2 mil­lion African Bank clients, en­abling them to in­cor­po­rate im­por­tant so­lu­tions into their fi­nan­cial plan­ning process,” Kruger said.

The lend­ing ac­tiv­i­ties will be­come op­er­a­tional in the first half of 2018. The deal is sub­ject to reg­u­la­tory ap­proval.

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