JOHANNESBURG – According to a 2018 World Bank report, 66 percent of sub-Saharan Africans are unbanked.
Financial inclusion remains elusive in Africa and most times access to it for micro, small and medium-sized businesses (SMMEs) remain a key challenge for these to scale.
In South Africa, where various studies have identified racial-profiling as one of the impediments for the previously disadvantaged, raising funding remains a thorny issue.
Last year, we collaborated with the World Bank to do research on SME finance gaps in South Africa and the result deepened our understanding of the challenges because even though there are so many financial instruments and institutions, access to funding for seed and micro/small enterprises remains limited or tightly wrapped in red tape.
Recently, Bright On raised R10 million from Alpha Code, Rand Merchant Investment Holdings’ investment vehicle for high-impact start-ups.
Bright On is an online peer-to-peer lending platform that provides affordable working capital for emerging small businesses with growth prospects.
It has grown its SME lending book to more than R25m and expects the lending book to exceed R50m by early next year, potentially increasing to R100m in 2021. The Bright On team has grown from its initial two co-founders, Tsepo and Koena Headbush, to six permanent staff.
Start-up entrepreneurs such as Tsepo and Koena are always inspiring to watch. Having launched their businesses a few years ago and joined the ecosystem at 22 on Sloane for the past two years, it’s been a pleasure to share their story.
I believe that all start-ups need is a vibrant ecosystem that provides them both the room and the platform to rise to the next level.
Basically, they need an inspiring space of trusted peers, advisers, mentors and a conducive environment to keep thriving, which I believe we strive to always achieve at 22 on Sloane.
Tsepo has maintained that “our limited success is your success and I have expressed this sentiment a number of times to a number of people in your team”.
This week, at 22 on Sloane, we gathered all our start-ups to celebrate Tsepo and his team’s motivating journey. Our campus manager often complained that Tsepo always exceeded his monthly hour allocation for meeting rooms. The proof is in the pudding.
We also pay homage to Alpha Code.
As the banking trends of consumers continue to change, start-ups in Africa must find new, user-friendly, frictionless and mobile ways to bank the unbanked by exploiting technology.
Business opportunities in the fintech space are plentiful and some of the start-ups that have disrupted it in Africa prove that there is more opportunity for new products to serve the African population.
Start-ups such as M-Pesa, Flutterwave, Yoco, Bright On and many more are proof of this.
I have always believed that the goal for start-ups is to find ways to disrupt the various formal and informal markets, improve user experience, create new economies and ensure access for the previously disadvantaged.
Kizito Okechukwu is co-chairperson of the Global Entrepreneurship Network Africa; 22 on Sloane is Africa's largest start-up campus.