There are more than 2.5 million small and medium-sized enterprises (SMEs) in South Africa, however accessing funding remains still a major challenge for many entrepreneurs.<\/p>\n
To combat this, the country now has a growing alternative lending sector that is focused on providing funding for this market, says Dominique Collett, head of AlphaCode.<\/p>\n
“We\u2019re interested in helping fintechs that are doing things that the banks aren\u2019t doing well,” Collett said.<\/p>\n
“SME lending is a massive gap and a global problem. As SMEs are the lifeblood of any economy, it\u2019s important that these new financing players succeed and meet the needs of this market.”<\/p>\n
According to Johan Bosini, a partner at Quona Capital, South African banks have historically focused on consumers rather than small businesses as businesses are less homogenous and therefore more complicated to service.<\/p>\n
“Our banks\u2019 credit products are usually inflexible in their loan requirements and take a long time to process more complicated credit applications.<\/p>\n
“Banks can at times provide better pricing than alternative lenders, but small businesses often need funding immediately as opportunities present themselves and they are willing to pay a premium for speed and flexibility,” he said,.<\/p>\n
Finfind data shows that startup capital, buying equipment, expanding businesses and working capital are the largest funding requests in South Africa.<\/p>\n
Below is a list of the different types of alternative financing available to South African SMEs.<\/p>\n
Fincheck<\/strong><\/a><\/p>\n Lulalend<\/strong><\/a><\/p>\n Fundrr<\/strong><\/a><\/p>\n Merchant Capital<\/strong><\/a><\/p>\n iKhoka<\/strong><\/a><\/p>\n Zande Africa\u00a0<\/strong><\/a><\/p>\n Bright on Capital<\/strong><\/a><\/p>\n\n
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