Capitec and GoTyme Bank are giving small businesses loans based on the cash they make, not on the assets they own, Cape Business News reported.
The approach is meant to help owners who are often turned down by banks. Many small firms do not have property or other collateral to back a loan.
Capitec sells card machines, also called point of sale devices, to its business clients. According to the report, the bank uses the sales data from these machines to check how much money a business brings in. It then uses that data to decide how big a loan it can offer.
Capitec’s business clients more than doubled, from 244,000 to 545,000, in the six months to the end of August 2026. The number of merchants using its card machines rose from 32,000 two years ago to 141,000 this year.
Money passing through those machines also grew. Turnover went from R27.1 billion two years ago to R61.8 billion this year.
Capitec’s lending book grew by 37% to R35.5 billion over the period. The part that lends to very small businesses rose by 175% to R4.2 billion.
GoTyme Bank offers working capital loans that do not need collateral. The bank has granted R17 billion in these loans to 90,000 businesses so far, the report said.
GoTyme business group executive Miguel Da Silva said the group was proud to help businesses grow. He said it was also happy to give them cash just to pay the rent while they waited for invoices to be paid.
Small business owners in South Africa have long complained that banks reject their loan requests. The usual reason is a lack of collateral.
Lending to new businesses is high risk for banks, the report said. To protect depositors’ money, banks often charge high interest and set strict rules. This makes loans costly and hard to get for many owners.
Cash flow lending also has risks, Cape Business News reported. Lenders need advanced automatic credit scoring systems. If those systems get it wrong, the banks could face more unpaid loans.
The wider economy also plays a part. If it comes under strain, businesses may earn less cash and find it harder to repay. Without collateral, lenders would have few ways to get their money back if a client closes down.
Source: this article is based on reporting by Cape Business News. Image: Cape Business News. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.