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U.S. investment bank Warburg Pincus said Tuesday it will invest $221 million into the Israeli credit card business it purchased last month from Bank Leumi and Azrieli Group.

Daniel Zilberman, managing director and head of Europe for Warburg Pincus, said at a Bank of Israel conference on Tuesday that he wants to expand credit to consumers and small businesses, Reuters reported.

MAX, the new name for Warburg’s credit card company, will take time to expand, as it is no longer part of a bank and will need to find third-party funding, said Zilberman. As Leumi Card, the unit had issued more than 2.6 million credit cards and offered merchant acquiring services to over 40,000 businesses.

Israel’s lending and payments sectors lag behind other Western countries, largely because of consumer lending habits in the country and a lack of competition, he added, citing data that shows only 5% of lending to small and mid-sized businesses in Israel comes from non-bank sources, compared to nearly 50% for similar enterprises in the United States.

Non-bank lending to consumers in Israel comprises about 20% of total lending, he said. Credit cards are growing increasingly popular in Israel, as cash use has fallen to about 30% of transactions from 40% five years ago.

Warburg Pincus bought the Leumi card business in conjunction with three Israeli strategic partners: Menorah Mivtachim, Clal Insurance & Finance and Allied Group, the Jerusalem Post reported.

The sale came after Leumi and rival bank Hapoalim were after regulators told Leumi and rival bank Hapoalim to dump their credit card businesses by 2020.

Peter Green is an award-winning business and investigative journalist based in New York.

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