Retail Capital was established ten years ago, and it has disbursed over ZAR 4.5 billion (USD 300 million) to more than 38,000 small business owners since inception. It is on target to disburse ZAR 8 billion (USD 534 million) to small businesses by 2023.

Investment Officer Stanley Anyetei: “In South Africa, small and medium-sized enterprises (SME) make up almost 90% of businesses, provide approximately 60% of local employment and contribute more than 34% of GDP. However, access to funding remains one of the highest impediments to SME growth.”  

Retail Capital addresses this challenge by leading with technology and working alongside SME clients. It bases advance repayments on the monthly turnover of SME clients and a set repayment percentage. Retail Capital charges a fixed fee over the duration of the advance, with no upfront costs, hidden fees or collateral required. This is what sets Retail Capital apart from the traditional banks and other competitors who require assets to be pledged as security.

To apply for a cash advance, SMEs must have a monthly average turnover of over ZAR 30,000 (USD 2,000), a turnover history of over three months and business ownership of more than six months. Payment structures are tailored to match SMEs’ turnover and cashflow cycles.

Stanley Anyetei: “This investment further highlights our commitment to identifying innovative means to promoting financial inclusion across Africa and the MENA region.”  

The USD 10 million debt facility was provided by Triodos Microfinance Fund and Triodos Fair Share Fund.

Investing in fintech for greater financial inclusion

This paper explores financial technology as a tool for greater financial inclusion, specifically in emerging and developing markets. Download it here.