SHIFT AS BUSINESSES TURN TO SOUTH AFRICA’S MAJOR RETAILERS FOR LOANS AND FINANCING
Staff Writer - 03 October 2022
Shoprite and Massmart, two of the biggest retailers in South Africa, have announced new financial products, including working capital, aimed at small and medium businesses in the country.
Shoprite, off the heels of launching a fully-fledged transactional banking account in August, has launched a new supply chain finance product, CredX, which it said will help its suppliers – including SMEs – with access to funding.
The group said that its finance product is often cheaper than bank financing and is available to all suppliers. It is expected to assist SMMEs, for whom cash flow constraints and access to affordable funding are often significant growth obstacles.
The benefits include:
An affordable financing product with an all-inclusive interest rate and no additional fees;
100% of invoice value available for financing;
No further onboarding requirements as the group has already vetted its suppliers;
Approval and payment of financing within 24 – 48 hours.
“There is a definite need in the market, especially amongst small- and medium-sized suppliers who struggle to access finance through traditional routes,” said Shoprite’s general manager for financial services, Jean Olivier.
“While there are alternative supplier finance products available, we can provide a better service due to the Shoprite Group’s extensive ecosystem, and we expect this initiative to build even stronger supplier relationships.”
CredX is in partnership with UK-based Demica, a provider of supply chain financing solutions, and follows the recent launch of Shoprite Next Capital, a business division dedicated to growing commercially-viable SMMEs to further the retailer’s continued efforts to give small suppliers access to the market.
Massmart lending
Shoprite is not the only retailer venturing into the lending space, with Massmart announcing a partnership with fintech Retail Capital, to provide access to funding for SMEs in the country.
“There are approximately 2.6 million SMEs in South Africa contributing 34% to GDP, however, many still struggle to secure financing,” said Varsha Dayaram, senior VP for Group Financial Services at Massmart.
“These businesses play a huge role in our economy, so we are grateful that, with the support of Retail Capital, we are able to assist these SMEs to flourish by helping them maintain a healthy cash-flow and replenish their stock.”
Through the partnership, business owners will be able to access working capital of up to R5 million, within approximately 24 hours.
Massmart also offers access to its pre-funded Mastercard chip-and-pin cash card, which enables traders and commercial customers to earn 1% cash back on their spend in Massmart stores, including Makro and Jumbo Cash and Carry.
This will be extended to Builders Warehouse in the near future, the group said.
Businesses can apply for the funding through these channels:
Makro.retailcapital.co.za
Jumbo.retailcapital.co.za
Builders.retailcapital.co.za
Visiting USSD *134*515#
Retail Capital said that it charges a flat fee instead of interest or hidden service fees on the funding.
“Payments are linked to a percentage of turnover, making it more affordable. This product is the result of extensive market research and customer feedback, ascertained by creating focus groups and understanding their needs. We are proud of the end result being easy to access to short-term funding that unlocks SME growth,” it said.
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’