South African banking group Absa has increased its stake in Blue Financial Services, the pan-African micro financier, to 21% from its previous holding of 16%.

In a statement to shareholders, Blue said that Absa increased its stake by 5%, and also extended an R120m lending facility.

"We have raised a lot of money offshore and it is a positive sign for us that we can now raise money from a local group like Absa," said Blue CEO Dave van Niekerk in a report on Fin 24.com

According to Fin 24, a tie up between Absa and Blue could be on the cards as it would allow the banking giant access to the micro-lending space.