As a native South African, it always bothered Philip Belamant to see payday lenders target the people who could least afford it with high-interest loans. These lenders knew that their customer base could not obtain better rates anywhere else due to poor credit or lack of credit and took advantage of the situation.
Although payday lenders are an extreme example due to the potential of charging triple-digit interest rates, they are not the only lenders that take advantage of the poor. Other creditors would offer low-income people without an established credit history high-interest loans that they had to pay back almost right away. He vowed while he was still in school at the University of Johannesburg to disrupt the traditional financial services industry, and that is exactly what he did.
Philip Belamant Creates His Own Company at Age 21
After graduating from the University of Johannesburg with an Information Technology degree in 2006, Philip Belamant soon created PBel after formally seeking funding for it. The company’s initial product was social games that people could play on their mobile devices. Customers could also buy prepaid airtime that gave them access to digital currency, making it easier to manage their financial affairs without a bank account.
The strong customer interest in a mobile payment platform inspired Philip Belamant to change the direction of his company. He decided to focus on building a platform of his own based on feedback from customers. After creating a mobile payments business, his company PBel expanded rapidly. He sold PBel in 2012 to focus on developing other apps that would disrupt the traditional financial services industry. This decision had a major impact on the predatory payday lending industry.
How Philip Belamant Single-Handedly Took Down Payday Lenders in South Africa
Customers who buy a digital currency from one of Belamant’s apps often use it to pay their bills. With their permission, he analyzed his customers’ payments to see where they spent the most money. He noticed that much of their money was going to repay payday loans at extremely high-interest rates that they could not afford. This realization caused him to create a payment card for customers that they could use without paying interest at all.
With the new alternative to payday lending, Belamant transferred money to customer cards that they would then swipe to purchase necessities like food, clothing, and healthcare. After making a purchase with a confirmed merchant, customers repay the advance in a few installments without added interest. Just like he did with his World Food Programme partnership, he made the cards only good at businesses where customers could purchase things they needed for survival.
Philip Belamant called this new product Manje, and eight million people signed up for it within six months. The result was that more than half of South Africa’s payday lending companies shut down within 12 months. Although he has been an entrepreneur all his life, this was one type of company that Belamant did not mind forcing out of business.