Business loans to SMEs in SA now possible within three days

Pollen, the Stellenbosch-based online business lender specialising in small to medium enterprises (SMEs), says it wants to drastically change the SME business lending space — a sector traditionally underserved by South African banks.

The company, which started operating eight months ago, has done R100m in loans, 65% of which are repeat business.

The idea behind Pollen is to give entrepreneurs and SME business owners fast business loans via an online application and vetting platform. Pollen business loans range from R50,000 to R1.5m.

The company believes that making it easier for SMEs to access funding will boost the sector, which was identified by the government as a key jobs driver.

While the National Development Plan (NDP) — the government’s blueprint for eliminating poverty and reducing inequality — has set ambitious goals for the SME sector, entrepreneurs continue to face challenges such as red tape, a lack of access to finance and the high cost of doing business.

Pollen CEO Louis du Plessis said SA was way ahead of the global market in terms of online personal loans, with companies such as Wonga and Capitec, but that it lagged behind when it comes to unsecured business loans to the SME market.

“Last year, we developed a tech platform to do credit vetting in a short amount of time, and which delivers business loans to SMEs within three days of the application process. I knew there was a vacuum in SA for such a business; that it could solve a major issue facing small to medium businesses here,” said Du Plessis.

Du Plessis set up the company with Anglo African providing the funding backbone and operational support.

He said the market for online lending had huge potential since SA’s SME sector comprises 1-million registered companies.

“It’s a substantial market,” said Du Plessis, adding that Pollen provided loans to small businesses with an annual turnover of R1m and over, up to medium-sized companies with a turnover of R50m.

Anglo African Group chairperson JP du Plessis said: “The financial technology space is a growth industry, and the next-generation lenders such as Pollen, OnDeck, Moula and others are filling a gap left open by traditional banks, which have operated in the same way for over 40 years.”

Written by: Bekezela Phakathi, Business Day
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