Telecommunications giant Vodacom has launched a new small, medium-sized and microenterprises (SMME) business funding product that lets business owners apply online for funding and have an answer within four hours.
The VodaLend platform, launched by Vodacom Financial Services, aims to help narrow the significant SMME credit gap of between R86-billion to R346-billion that exists.
This emerges as the SMME sector faces even greater pressure as South Africa faces a lockdown to curb the spread of Covid-19.
“Given the country’s weak economy in recent times, many businesses are already having their resilience tested by having to work with restricted budgets and limited access to credit while navigating local and international economic challenges beyond their control,” said Vodacom Financial Services CEO Mariam Cassim.
Access to funding has become increasingly critical to the sustainability and success of a growing business, as many SMMEs face significant financial challenges in the current economy as it relates to access to funding and the ability to receive cashless payments in an affordable way.
“Many of these companies are unable to meet the strict banking requirements to access credit. Complicated forms, long approval times and the high cost of credit does not work in favour of these small businesses, resulting in unnecessary, avoidable challenges and obstacles for business owners,” Cassim continued.
VodaLend executive head Quintin van Vuuren added that many businesses, despite being experts in trade and the production and sale of products and services, struggle to navigate the complex financial environment in which their businesses operate.
“They need assistance with financial literacy, financial planning and effective money management. The wasted effort in approaching the wrong funders or submitting incorrect information can be spent on more productive activities.”
Fintech solutions are well positioned to step in and provide funding to this sector of the market, especially now that many small businesses will experience cashflow challenges in the face of the Covid-19 health crisis, he continued.
VodaLend has the ability to process many multiple funding applications at reduced transactional costs and introduce an innovative repayment method.