Sanlam Group acquires controlling stake in payment solutions provider Q Link Holdings

SOUTH AFRICA – Sanlam, a financial services group, has bought a controlling interest in payment solutions provider Q Link Holdings, its first fintech investment.

Sanlam Private Equity (SPE) agreed to acquire Q Link’s shares from UK based private equity fund Apis Partners, local private investment firm Multiply Group, and other minority shareholders.

SPE managing partner, Paul Moeketsi, said the company had been closely monitoring the fintech space in the lead-up to the acquisition

“We are seeing the significant social impact, especially around financial inclusion and improving the lives of previously disadvantaged communities through the provision of financial access and high growth and good return prospects from this sector,” he said.

Moeketsi said Q Link had a robust business model and had been the preferred payment collections partner for many insurance companies for over 20 years.

Q Link provides payment application software to the South African insurance industry and other third-party benefit providers.

The software manages deductions in both the payroll and bank collection streams.

Q Link founder and chairman Henry Smith said the company was looking forward to working with SPE as it entered the next growth phase of its business.

“We are delighted to align with a commercial investor who understands the importance of Q Link’s continued independence as a strategic payment collections partner for several insurance companies in South Africa,” stated Smith.

Q Link services more than 4.5 million employees, collecting R4.5 billion (US$290.89m) in monthly premiums for over 133 clients, many in the insurance industry.

Sanlam explained that the company’s software improved collection success rates while optimising costs.

“The concept of ‘affordability and control’ ensures that only valid and affordable deductions are processed through employee payrolls,” the company stated.

“Currently, the company facilitates collections for over 30% of all recurring retail life insurance premiums in the country.”

“The Emolument Attachment Order solution has saved South African public sector employees more than R300 million (US$19.39m) in invalid and over-deductions from court orders since 2014.”

Sanlam expects the deal will grow direct jobs by around 28% over the next few years.

“This will be done through the rollout of the new Moneyhub service, a consolidated collection and disbursement platform, integrating payroll, debit order and early debit order (EDO) deductions in line with the new mandate authentication process, DebiCheck,” said Moeketsi.

An additional 757 indirect jobs will be created in the wider economy, according to the National Treasury domestic output multiplier for finance and business services sectors and the company’s projected revenues.

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