The FinTech division of JSE-listed retailer Pepkor reported a decline in revenue in the six months to March 31.
Pepkor told investors today that its FinTech business reported a 7.8% drop in revenue to R3.7 billion in the first half of the year.
The company operates its FinTech division through Flash and Capfin.
Pepkor attributed the decline in revenue at its FinTech business to lower revenue recognition at its Flash business.
The retailer said revenue from the FinTech segment contributed 9% to total revenue of R40 billion for Pepkor.
Pepkor said the Flash business had performed well, increasing profitability by more than 20% in the six months to the end of March.
“The deliberate change in product mix in the Flash business continued to weigh on statutory revenue growth while management turnover (based on face value of products sold) increased by 10.9%,” said the company.
“The basket of products offered to traders in the informal market was expanded and the average turnover generated per trader improved by 10% during the period.
“Flash contributed 83.6% to the FinTech segment’s revenue for the period.”
The Flash business has enabled people in townships and rural areas to start their own businesses using Flash business devices while existing shop owners are able to increase their business by offering multiple services to bring more feet into their shops.
A Flash business can be a Spaza shop in your township or village. Flash is a tech company that enables small business owners to offer affordable payment options.
It is now the largest informal retail network in Africa and is supported by its dedicated field staff who operate throughout the country.
It also promotes merchants and creates a safe, and convenient way for people to get what they need without having to travel to the city.
Capfin, which was established in 2010 with a vision to provide affordable credit products and services to customers, grew its revenue by 20.0% during the period under review and expanded its loan base to 289 000 loans from 251 000 loans in the previous year.
The loan book increased to R2,5 billion from R2,1 billion a year ago (gross).
“The provision level was maintained at 18% based on satisfactory levels of collections and non-performing loans,” the company said.
Capfin has partnered with PEP and Ackermans to provide convenient and reliable services to clients.
