The International Finance Corporation (IFC) has announced a significant investment in South African fintech company Lula, aimed at boosting access to finance for small businesses. IFC will provide Lula with a local currency loan of 170 million South African rand (approximately $10 million).
This funding is designed to unlock working capital for thousands of micro-, small-, and medium-sized enterprises (MSMEs) across South Africa, a sector that is critical to job creation and economic growth.
Lula specializes in offering fully digital, unsecured loans to businesses that are often excluded from traditional banking systems due to a lack of collateral or formal credit history. Notably, around 90% of Lula’s customers are first-time business borrowers, highlighting the company’s role in expanding financial inclusion.
Trevor Gosling, CEO of Lula, emphasized the broader mission behind the partnership:
At Lula, our mission is to empower every SME in South Africa to succeed. When small businesses thrive, the entire economy and society benefit. This partnership with IFC will enable us to provide more working capital to more SMEs, fueling their growth and long-term success. We’re excited to collaborate with IFC to drive meaningful impact for small businesses.
Ethiopis Tafara, IFC’s Vice President for Africa, echoed this sentiment:
Our partnership with Lula leverages its innovative digital lending model to expand access to finance for South Africa’s small businesses. By empowering entrepreneurs, we aim to create jobs and foster a more resilient, inclusive economy.
