South African financial technology company Lula has secured R340 million (approximately $21 million) in local-currency funding from FMO, the Dutch entrepreneurial development bank, in a move set to significantly improve access to finance for small and medium-sized businesses across the country.
The new funding will allow Lula to scale its technology-driven lending platform, which provides fast, flexible working capital to micro, small, and medium enterprises (MSMEs) that are often underserved by traditional banks. Many SMEs struggle to access credit due to limited collateral, thin credit histories, or volatile cash flows—challenges that conventional lenders are typically unwilling to accommodate.
Lula’s platform is designed to address this gap directly. The fintech offers loans of up to R5 million, with approvals and disbursement possible within 24 hours, giving business owners quick access to capital for urgent needs such as inventory purchases, staff salaries, or operational expenses.
The FMO investment follows a period of strong growth for Lula. In 2023, the company raised $35 million in Series B funding, led by Lightrock, with participation from International Finance Corporation, Quona Capital, DEG, and Triodos Investment Management. More recently, Lula secured an additional $10 million local-currency loan from the IFC, further strengthening its lending capacity and reinforcing investor confidence in its business model.
According to Lula, the latest funding will significantly increase on-lending to SMEs that remain locked out of the formal banking system. The focus is on providing working capital that aligns with the realities of small business operations, rather than rigid lending structures that can constrain growth.
Trevor Gosling, co-founder and chief executive officer of Lula, said the investment is a strong endorsement of the company’s mission. “Access to capital remains the single biggest hurdle for small business owners. By bridging this gap, we aren’t just funding businesses—we’re fuelling the engine of our economy,” he said.
A key feature of the funding is that it is denominated in local currency, an important factor for both the lender and borrowers. Local-currency financing shields SMEs from foreign exchange volatility, allowing Lula to offer predictable, stable, and sustainable lending rates. For small business owners operating on tight margins, this stability can be the difference between survival and long-term growth.
FMO also highlighted the broader economic impact of the partnership. Angelica Ortiz de Haas, Africa Manager for Financial Institutions at FMO, said the investment aligns with the bank’s strategy to support fintech solutions that promote financial inclusion and strengthen competition within local financial ecosystems.
Beyond individual businesses, the funding underscores the growing role of alternative finance in South Africa’s economy. As SMEs gain access to timely and affordable capital, they are better positioned to expand operations, create jobs, and contribute meaningfully to local economic development.
Looking ahead, the partnership between Lula and FMO is expected to support thousands of South African SMEs over the next three years, helping to build a more inclusive, resilient, and sustainable small-business ecosystem—one where access to finance is an enabler of growth, not a barrier.
