Top South African bank building mini-Capitecs around the world

Former Capitec CEO Gerrie Fourie is acting as a scout to help the bank build mini versions of itself in markets such as Mexico, Denmark, and Eastern European countries. 

This is part of a long-term process of taking the bank’s model global, with Capitec believing it can disrupt multiple markets. 

If successful, this would yield tremendous benefits for the bank, diversifying its earnings beyond South Africa and increasing exposure to faster-growing economies. 

Denker Capital co-founder and financial sector expert Kokkie Kooyman explained to BizNews that Capitec is going about this process very deliberately. 

Kooyman said Capitec’s offshore expansion began a decade ago when it acquired a 25% stake in a business called Cream Finance. 

This was a strange purchase for Capitec at the time, with Cream Finance having exposure to six different banks operating in six vastly different jurisdictions from Mexico to Denmark. 

“Listen, we are getting a ringside seat to observe six different banks, six different regulators, six different types of consumers, and six different tax regimes. We are just learning the whole time,” Fourie told Kooyman. 

It was not as simple as this: Cream Finance ran into serious issues after Covid-19, even as its investee banks continued to lend aggressively. 

This resulted in a mountain of bad debts for the company’s banks and put Cream Finance into severe financial trouble. The trouble it found itself in was a golden opportunity for Capitec. 

Capitec snapped up 97.5% of Cream Finance by buying out most of its shareholders, turning it into a fully controlled platform for the South African bank’s expansion. 

The next phase of the bank’s international expansion would come when Fourie stepped down as Capitec CEO in July 2025. 

Initially, Fourie left Capitec completely to work on projects outside of the bank and enjoy a well-earned retirement. 

However, a year later, Fourie was reappointed to Capitec’s board. Kooyman said this was a way to use him as a scout for the bank. 

“What Gerrie is doing at this stage is travelling around the world to understand these client bases and how they can be banked better,” Kooyman said. 

“This is a much more relaxed role. He has been quite clear that it will take ten years to do what they want to do in this space.”

“It reminds me of when they used to travel to taxi ranks to understand South Africa’s client base. Now, they want to do that and build six Capitecs around the world.”

Kooyman explained that the plan is to deploy Capitec’s learnings from South Africa and the model it has been extremely successful with in these new markets. 

Capitec has developed efficient systems to lend to the lower end of the market while keeping bad debts under control. 

All the while, its value-added services business generates significant profit from fee and commission income. 

Kooyman described Capitec’s approach as building a flywheel, piece by piece. The bank first builds a base of clients and then continuously layers on products and services. 

These products and services boost client activity, generating more fee and commission income while increasing lending. 

In South Africa, this model delivers an incredible 33% return on capital. It will be difficult, but Capitec is planning to do the same in six markets around the world.