SOUTH AFRICA – Telkom, a telecommunication provider, has launched a lending facility, targeting businesses with loans of up to R5 million (US$0.3m), joining its peers that are also providing funding options to small and medium enterprises.

The telco unveiled the lending platform, inviting qualifying businesses to apply online, saying it is eliminating old-style bank processes, as fast funding for businesses is becoming a necessity.

It is now targeting small businesses, an area in which Sibusiso Ngwenya, managing executive, Telkom Financial Services, sees growth prospects.

“Business funding from Telkom Lend will ensure small businesses are able to scale and grow with fast funding, without the need to put up any collateral,” Ngwenya said.

“With funding offers ranging from R20,000 to R5 million (US$1,190 -0.3m) depending on monthly turnover, funding can be paid back over three to 12 months on a daily or weekly basis, depending on the business cash flow.”

Telkom says the selection for eligibility is fully automated, which helps reduce the loan processing time.

Ngwenya explains: “Data is used to review the creditworthiness of businesses and speed up the funding process. The combination of technology and data analytics not only provides funding for businesses but is also driving financial inclusion while supporting economic growth.”

With Telkom Lend, Telkom has joined Vodacom, which already offers loans to small, medium and micro enterprises.

This, as telcos continue to push into financial services, making the area highly contested for the sector that is seeking to diversify revenue streams away from data and voice.

MTN is leading the charge in financial services, recording blockbuster fintech transactions worth over US$116.3 billion (R1.8 trillion) in the first half of the year.

Vodacom has attracted 2.2 million downloads and 1.6 million registered users on its super app since its launch.

“Money will be paid into the account within 24 hours, once approved to use for various needs, including expanding a business, purchasing equipment or renovating premises.”

The minimum criteria include six months of ownership, three months trade history and R30,000 (US$1,785) monthly turnover.

Standard Bank’s BizFlex digital loan facility has disbursed R3 billion (US$178.26m) to small, medium and micro enterprises (SMMEs) in the past three years.

This is according to a statement issued by the bank, saying between July 2019, when BizFlex was launched, and June 2022, the facility provided loans to approximately 10 000 SMME businesses across SA.

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