South African microfinance company Barko is looking to launch a digital bank using banking infrastructure by banking software provider Temenos, according to a statement released today.

The statement noted that the 1996-founded micro financing institution has plans to introduce a retail digital bank in South Africa built on front-to-back services by Temenos. These include the Temenos Transact core banking software, as well as The Temenos Banking Cloud.

The company aims to launch a digital banking solution for South Africans that are underserved by the traditional banking system. This includes “longer-term and lower-cost loans, competitive affordable banking products and easy to use services” across both digital channels and branches, the statement said.

Barko has applied for a mutual banking license, the statement also noted. Further details about the digital bank and its services are not immediately clear.

Barko currently provides short term loans with a 30-day tenure. These loans are accessible by individuals who have been permanently employed for at least six months. The company disburses 125,000 loans per month, according to Temenos.

Temenos has previously worked with Barko on an omnichannel lending solution through a digital microfinance lending app, the statement said.

Temenos provides a cloud-based AI front office, core banking, payments and fund administration software.

“We want to build a digital bank for the millions of South Africans that are unbanked or underserved by the traditional banks. The extended collaboration with Temenos is critical to our mission.

 

With Temenos’ modern cloud banking platform we can bring new products to market faster and at a significantly lower cost compared to banks on traditional core banking systems. Ultimately, this means we can pass on savings with products and services that improve the financial lives of the people that bank with us,”

Kobus de Wet, CEO, Barko, said.

Featured image credit: Temenos