ENTREPRENEUR: Yalu’s Tlalane Ntuli challenges the financial giants
This credit life start-up has ambitious plans to disrupt the very steady income stream of the major banks – and it is already facing push-back
Earlier this year a series of cheeky billboards appeared along the M1 between Joburg and Pretoria about credit life cover, with no indication of who the sponsor was.
The billboards took a jab at SA’s banks by encouraging consumers to think about the cost of their existing credit life cover — as well as the conduct of banks, which make it nearly impossible to shop around for cheaper cover.
The sponsor revealed itself in the next round of billboards as Yalu Financial Services, a credit life specialist.
Credit life is an area of banking which is ripe for disruption: most people who take out a personal loan, vehicle finance or a home loan are not even aware that they are paying credit life premiums on those products.
And this is where Yalu comes in. Tlalane Ntuli is co-founder and COO of the company, which was launched in 2017. She says that though banks may lead customers to believe otherwise, people have the right to switch to a cheaper provider, even while retaining their bank as the provider of a loan. Yalu offers the most competitive rates, she says.
Prior to new regulations introduced in 2017, clients were paying up to R8.50 a month for every R1,000 of cover, says Ntuli. The limit is now R4.50 for personal loans, but existing credit life agreements did not need to be changed. The banking sector is, unsurprisingly, unwilling to let go of this income stream.
Ntuli, 40, who is from Lesotho, started her career at Nedbank’s operation in that country. She graduated from the University of Cape Town with a degree in human resources and a diploma in marketing.
She was later GM of brand and marketing at the now defunct Glenrand MIB and afterwards joined the mass market unit at Old Mutual and also worked at FNB.
Her move to FNB proved fateful, as she sat on the FNB Life executive committee with Nkazi Sokhulu, who later became her business partner and the CEO of Yalu.
Making the move to a start-up hasn’t been easy. "Life at a corporate is more comfortable," says Ntuli. "At FNB I spent most of my time in meetings and then had to channel the results to my team.
"Don’t let anybody fool you — it is really hard work to be an entrepreneur and most people would earn more money staying in corporate life." She says neither she nor Sokhulu could run Yalu without the help of supportive spouses.
At home, Ntuli works between 9pm and midnight. She doesn’t get a clear run to work during the day, as she has to deal with staff and clients.
And she is still responsible for Yalu’s human resources functions. But as the headcount moves towards 35 she says she might have to appoint a manager to handle that.
Yalu now covers 10,000 loans with a face value of R450m. "We have passed on R50m of savings," Ntuli says.
And now the company is looking for new shareholders. Its current partner is the Public Investment Corp, in a rare example of its involvement in a start-up investment. It might prove to be one of the PIC’s few decent unlisted investments of the past few years.
Still, Ntuli says: "It is a capital-intensive business and we need more funding."
Yalu’s products are underwritten by Old Mutual Alternative Risk Transfer.
Ntuli says Yalu’s biggest frustration has been the delaying tactics adopted by the banks, which want to keep clients on their books. The past master has been African Bank, which at first complained that Yalu’s terms and conditions were not aligned with its own, and then demanded customer verification. Even the former colleagues of Ntuli and Sokhulu at FNB have been slow and have often not cancelled a client’s cover within the prescribed 30 days.
"We hope that as the Treating Customers Fairly regulations become more entrenched this behaviour won’t be tolerated."
Ntuli says Capitec stands out for its co-operative attitude.
"There is an alignment of values between us," she says.
Yalu is expected to expand in the life industry. It will soon launch credit life that is tied to vehicle finance and home loans, but regular life and funeral cover may not be far away.