4 South African FinTechs helping SMEs bridge the funding gap

By Edlyn Cardoza

The COVID-19 crisis has had a devastating impact on SMEs in South Africa. SMEs face barriers when securing capital to grow their business, resulting in an SME funding gap. One of the biggest problems SMEs face is the lack of access to credit.

Speaking on Uplinq and Nosmay’s partnership, Ishmael Yamson, Chief Executive Officer at Nosmay, said, “Many businesses in Africa function without maintaining diligent financial records, or without establishing a relationship with a national bank. We often refer to this as the ‘informal economy’, but it’s more appropriate to call it the unbanked economy. Sadly, these businesses are often underserved by financial institutions.”

According to McKinsey, SMEs make up about 98.5% of all businesses in South Africa. SMEs are crucial to the economy in South Africa, and optimal support is required to ensure their recovery and growth into the next normal.

Being a ray of hope to SMEs, FinTech companies have been coming together to help the continent’s SMEs overcome the challenges imposed due to the pandemic. A rising number of FinTech startups fund small businesses in SA using apps and online services.

Below are 4 South African FinTechs helping SMEs bridge the funding gap:

• Fundrr

Fundrr is a financial technology company that uses intelligent algorithms to holistically assess businesses and business owners. Therefore, it can provide quick and easy Biz Funding to assist SMEs in the SA region. With its Business Funding Solution, you can use your funds for whatever your business may need to soar!

• Lulalend

Lulalend is a FinTech company with a belief in the power of small business, making a difference, building a better solution, and striving for excellence. They aim to empower businesses across South Africa with the funds they need to grow.

• Merchant Capital South Africa

Merchant Capital was established in 2012 as a provider of alternate sources of working capital, explicitly designed for SMEs in South Africa. In 2013, the Capricorn Capital Group invested in Merchant Capital. Its investment in Merchant Capital adds great value to the team as the reference shareholder, bringing many years of success in financial services and lending. Merchant Capital was started to support businesses that don’t have access to traditional funding solutions.

• Uprise.Africa

Uprise.Africa is South Africa’s Equity Crowdfunding Platform. Its platform allows investors worldwide to invest capital into South African businesses in exchange for equity shares. Uprise.Africa is disrupting the country’s traditional funding landscape by providing an alternative method for businesses to raise capital in South Africa. Uprise.Africa is regulated and authorised by the Financial Sector Conduct Authority of South Africa.

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