South Africa’s first online business lender specialising in small to medium enterprises is forging ahead in the financial technology space, hitting the R1-billion mark in just four years.
Pollen Finance has lent over R1-billion to small and medium enterprises (SMEs) since it was established in 2015.
CEO Louis du Plessis believes Pollen has barely scratched the surface when it comes to the funding requirements of South Africa’s vitally important SME sector.
“What does a billion rand mean in our local economy? It means more SMEs are driving the economy,” he said.
To start, a billion rand invested in the economy could create around 100 000 much-needed new jobs.
The Stellenbosch-based FinTech company was first out of the gate in South Africa when it took its unsecured online business-lending model to market in 2015, delivering R100 million in loans in just eight months. Now it is the first to hit the one billion rand mark, which it did a month ago.
“This shows South African business owners are out there investing in what they do. We have already loaned R1-billion, but still think we have tapped into only a small segment of the SME market that is in need of funding,” said Du Plessis.
Global growth in the sector has not gone unnoticed. A recent World Economic Forum paper reported that the need for SME financing was widespread and that access to such finance was a “top three concern for doing business” in dozens of countries. It noted that “FinTech disruptors” were increasingly filling the gap left by traditional banks.
“We are certainly bullish about growth,” Du Plessis said. “Running in tandem with SMEs’ need for this type of funding is the development of the software over the past few years. It is always evolving, and speeding up.”
Pollen’s offer is delivering fast business loans ranging from R50 000 to R1.5 million within three days of application. But with a systems update, this will soon see loan pre-approvals within minutes.
What is staggering is that despite loaning R1 billion of its own money, Pollen’s debt default rate is a mere 3.5%, which is testament to the effectiveness of its lending criteria and its online application and vetting platform.
Competition in the unsecured lending sector has increased over the past four years.
“When we started in 2015, it was a unique concept but it is a lot more competitive now. It helps having the status of being a leader in the sector,” Du Plessis said. “Still, there is decent sized competition out there.”
Anglo African, the Stellenbosch-based investment company headed by JP du Plessis, is Pollen’s financial backer. So are his investors happy with Pollen’s journey so far? “They’re happy with our returns,” said Louis du Plessis. “Now we’re targeting our next billion.”