Peer-to-peer lending firm RainFin has launched a R100 million business-to-retail product directed at corporates and established businesses to participate in the crowd-funding space.
Barclays Africa (Absa) originally acquired a 49% stake in RainFin in 2014, however, last month, the company’s founders and directors said that they would buy that stake back.
Also known as crowd-lending, RainFin matches people looking for loans, with ‘investors’ looking to provide these funds and benefiting from an agreed rate of return.
Prior to this launch, RainFin said that the credit marketplace has been primarily used by small businesses seeking small (less the R750,000) loans for working capital.
“Now any size company can also benefit from raising larger capital amounts, outside of the conventional banking system i.e. directly from a previously untapped funding source: the retail market, institutional lenders, asset managers and even their existing customer and supplier bases,” it said.
Without the use of a credit marketplace, large businesses had no real cheap way of accessing retail and institutional lenders efficiently and quickly. “The RainFin credit team is able to list loans on the credit marketplace that are either fully asset backed or rated businesses with significant trading history and assets,” RainFin said.
Once on the marketplace lenders are able to lend as little as R1,000 or as much as R10 million to any borrower. RainFin collates these fractional participations and issues one consolidated loan to the borrower.
Established businesses will now, for the first time, also be able to access institutional funds, which have previously been reserved for corporates via the corporate bond market.
Corporate and established businesses can apply for funding up to R100 million, the company said.