South Africa’s fintechs chase a lucrative opportunity beyond payments

South African fintechs are expanding beyond payment services, targeting a lucrative opportunity to finance small businesses and consumers. Yoco, for instance, has secured a $100 million credit facility from Victory Park Capital to expand its cash advances business. The company leverages transaction data and customer relationships to finance small businesses that traditional banks find difficult to assess.

However, financing requires more than just customer numbers and transaction volumes – it demands capital, risk management, and the ability to finance responsibly, especially for customers whose financial circumstances can change rapidly.

Other South African fintech giants, such as Optasia and Paymenow, are pursuing a similar path. Optasia, which initially focused on airtime advances through telecommunications operators, is now shifting towards broader microfinance services. The company's revenue grew by 45% in the first nine months of 2026, with microfinance contributing to more than 80% of its total revenue.

Paymenow, on the other hand, offers employee financial wellness and earned-wage access services, helping workers access wages they have already earned before payday. While this can provide an alternative to expensive short-term borrowing, the long-term value of such services depends on whether they improve financial management rather than merely shifting pressure to an earlier point in the month.