Financial technology (fintech) company Finch Technologies has made a further significant investment to become the majority shareholder in South African business finance marketplace FundingHub.
This follows a previous investment in 2019 to boost small and medium-sized enterprises (SMEs) funding in South Africa.
“We are particularly interested in investing in technology-driven businesses that help financial service providers originate sales, onboard new clients in a seamless manner and enrich their own database.
"It is through the seamless origination and onboarding that real value is offered to businesses and consumers.
"We made a second investment into FundingHub, owing to its dramatic growth over the past 18 months. We are confident about the ongoing expansion of this business,” explains Finch Technologies CEO Michael Bowren.
FundingHub started four years ago and allows SMEs to easily compare funding solutions from R10 000 up to loans of more than R100-million at no charge.
FundingHub provides 33 banks and alternative lenders that are able to meet the needs of South African SMEs looking for finance to grow their businesses.
SMEs that apply for funding on FundingHub must have been in business for at least six months and have a R350 000 turnover. SMEs are matched with the most appropriate lender.
“Since the start of Covid-19, FundingHub has seen a dramatic increase in requests for financing from SMEs. This is for two main reasons. The first is SME distress and their struggles to manage cash flow.
"The second has been the inability or reluctance to visit a physical bank branch. SME owners are, therefore, searching and comparing options online.
"Businesses and lenders have been driven to accept a full digital solution which encompasses the vision of Finch Technologies, which is moving toward a full end-to-end marketplace, offering everything short of disbursing the final product,” Bowen says.