FirstRand and Lesaka Unbundle South Africa Lending
Summary
FirstRand is adding outside credit decisioning while Lesaka plans to fund loans with Bank Zero deposits, potentially reshaping South African mass-market lending.
On September 10, 2026, FirstRand (FANDF) and Lesaka Technologies (LSAK) described the same shift on their annual results calls: one is using an outside credit model to widen lending, while the other is buying a banking license so customer deposits can replace bank debt that funds its loan books.[1][2]
Deposit funding and credit decisions can be acquired separately
South African mass-market lending has depended on two capabilities held together. A lender needs retail deposits to provide relatively low-cost funding, and it needs a model that can assess borrowers with thin credit files. Established banks usually control both. A fintech without a banking license must still fund loans with bank debt or its own cash flow.
That combination is starting to separate. FirstRand's FNB already has deposits and customer access, but it invested in and connected Optasia's credit-decisioning capability to reach customers its existing approach underserved. Lesaka has payments distribution and lending customers, but it plans to acquire Bank Zero so it can take deposits and move its consumer and merchant loan books into the bank. The companies are filling opposite gaps in the same operating model, allowing competitors to obtain capabilities they once had to build over time.
Risk settings and funding structure are moving before revenue
FirstRand has already reflected the broader lending scope in a risk parameter. Its group through-the-cycle credit-loss ratio range remains 100-130 basis points, but the retail range increased by about 10 basis points. Management linked the tilt to unsecured growth activities including Optasia.[3] FNB's first product developed with Optasia launches in September 2026, so the product generated no revenue in the fiscal 2026 results just reported.[3]
Lesaka's clearest potential change is funding cost. At June 30, 2026, gross debt was ZAR3.8 billion and net debt was 1.9 times group adjusted EBITDA; close to half of gross debt funded its lending books.[2] Management said moving those books into Bank Zero would let customer deposits replace bank debt, reducing funding cost and group leverage.[2]
“Our lending books today are funded with bank debt. Once these books sit inside the bank, they can be funded with customer deposits.”
Chinese translation: Our loan books are currently funded with bank debt; after those books enter the bank, customer deposits can fund them.
Customer reach may widen before profits are redistributed
Once the two capabilities can be obtained separately, access to mass-market borrowers may be redistributed. FirstRand can evaluate customers it previously underserved. Lesaka said a banking license could widen the population it may choose to serve from roughly 12 million social-grant recipients to a further roughly 14 million people with taxable income.[1][2] The first effects should appear in customer acquisition, risk appetite, and funding cost before loan balances, credit losses, and profit change.
The evidence still describes operating preparation. The Bank Zero acquisition remains subject to Prudential Authority and Exchange Control approvals, and loan-book migration is scheduled by the end of fiscal Q4 2027. Standard Bank moved in the opposite direction in the first half of 2026, reducing personal unsecured disbursements by 8% because it maintained discipline on risk and affordability.[2][4] Investors should watch Optasia product revenue and credit losses, Lesaka deposits and leverage, and unsecured loan growth across banks. More entrants alone do not establish that the total lending market is expanding.
Companies exposed to the shift
- Capitec (CKHGF): Its banking license, internal credit model, and 26 million active clients place its core franchise inside the mass-market lending pool. New entrants may change its acquisition and pricing environment, but the evidence does not show that Capitec has already been harmed.[5]
- Old Mutual (ODMUF): OM Bank is also accumulating retail deposits and absorbing group lending, exposing it to the same funding-and-license mechanism. Its entry broadens competition but does not yet establish a profit outcome.[6]
- Standard Bank (SGBLY): The bank already controls deposits and underwriting but is reducing personal unsecured lending. It is both an incumbent competitor and an important counterexample to the industry thesis.[4]
Sources
[1] Drillr · FirstRand · 2026-09-10 · Fiscal 2026 results call
[2] Drillr · Lesaka Technologies · 2026-09-10 · Fiscal Q4 and full-year 2026 results call
[3] Drillr · FirstRand · 2026-09-10 · Fiscal 2026 results call Q&A
[4] Drillr · Standard Bank · 2026-08-13 · H1 2026 results call
[5] Drillr · Capitec · 2026-04-22 · Fiscal 2026 results call
[6] Drillr · Old Mutual · 2026-09-08 · Interim 2026 results call
This material highlights potentially overlooked industry changes and companies. It is not a stock recommendation.