BizFlex, the digital loan facility of South African bank, Standard Bank has disbursed R3 billion to small, medium and micro enterprises (SMMEs) in the past three years.
According to a statement released by the bank, the facility provided loans to roughly 10,000 SMME enterprises throughout SA between July 2019, when BizFlex was created, and June 2022.
With total assets at close to R3 trillion (about $173 billion), the Standard Bank Group of South Africa was the biggest bank in Africa as of 2021, according to Statista.
BizFlex is a paperless loan application, distribution, and repayment system that businesses may access through their online banking system, according to the big-four bank.
It outlines how data from direct business banker feedback, large internet banking survey, and in-person client interviews were used to build BizFlex.
The statement by Standard Bank comes as more South African companies seek SMME companies with lending facilities.
With the debut of its Telkom Lend product last week, JSE-listed telecommunications company Telkom Business made it possible for small businesses to apply online for funding of up to R5 million and receive a response within 24 hours.
Digital bank TymeBank announced earlier this month that, subject to regulatory approval, it had signed a deal with Retail Capital and its shareholders to acquire 100% of the fintech SME funder’s shares.
TymeBank will be able to offer working capital financing to entrepreneurs thanks to this purchase.
According to McKinsey, SMEs, which account for more than 98% of all enterprises nationwide and 39% of the GDP, are the backbone of South Africa’s economy.
According to McKinsey, the lifeblood of South Africa’s economy is SMEs that make up over 98% of businesses across the country and contribute 39% of the country’s GDP.
“Gone are the days when crippling fixed monthly loan repayments were expected from us even when our income was inconsistent or unpredictable,” says Standard Bank.
“One of the scariest things about operating a business is taking on debt when one is uncertain about future earnings, especially in tough times. With rising interest rates, business loan repayments that were once affordable can quickly start threatening cashflow.”
More generally, “data shows the difficulties South African businesses experience when trying to access flexible credit quickly are impacting their ability to survive and grow,” says Darren Segal, head of Standard Bank’s Moonshots.
“This is especially true in tough times when it is crucial for businesses to have the capital to take advantage of opportunity.”
With this challenge in mind, Segal adds, “we set out to launch a digital, fixed-cost, pay-as-you-earn loan facility – an ambitious undertaking for a business loan”.
Although BizFlex is currently only available to qualifying Standard Bank business clients in South Africa, “we are considering rolling BizFlex out to other African markets,” says Segal.
To assist them in introducing BizFlex to their customers, Standard Bank is also looking into collaboration opportunities with other non-competitive financial services organisations worldwide.