Alternative Lending Drives Growth of Fintech in South Africa

South Africa’s fintech sector is growing rapidly, driven by rising adoption of alternative lending, a new report by MD Finance, a financial technology provider, says. Growth is expected to continue, with a significant share of consumers planning to use alternative lenders for their personal needs.

The report, released in July, looks at the state of fintech in South Africa, focusing on alternative lending. It found that personal loan originations from non-bank lenders in South Africa grew by 11.5% year-over-year in Q1 2025 as more consumers sought these providers to meet financial needs. Demand is set to remain strong, with 35% of surveyed individuals looking to apply for a personal loan within the next year.

According to the report, South Africa’s alternative lending market is currently led by Finchoice, with 1.1 million monthly users and 352,900 unique monthly visitors. Finchoice is a subsidiary of Weaver Fintech, offering almost-instant, individualized short-term loans, mobile money, retail credit, insurance and value-added services.

Weaver Fintech also operates PayJustNow, a buy now, pay later (BNPL) product with 2.6 million customers, 100,000 new monthly sign-ups, nearly 3,000 retail partners, and over 10,000 points of presence nationwide.

Finchoice is followed by Capfin with 994,100 monthly users, and 463,400 unique monthly visitors. Capfin offers affordable loan products and services, claiming more than 11.3 million loans issued to date, and over 2.7 million unique customers.

Sanlam ranks third, 615,600 monthly users, and 360,100 unique visitors. Sanlam is a South African financial services group, providing insurance, investment, financial planning and retirement advice. It offers loans from ZAR 5,000 and ZAR 350,000, repayable over up to 84 months.

Another prominent player in South Africa is Lulalend, an online lending platform for small and medium-sized enterprises (SMEs), which uses an automated process to provide fast, flexible financing to businesses. Lulalend offers loans of up to ZAR 5 million (US$282,000), disbursable within 24 hours. It also operates Lula, a neobanking proposition featuring SME bank accounts, an artificial intelligence (AI)-driven cashflow management tool, and real-time access to funding.

Top alternative lending providers in South Africa, Source: MD Finance, Jul 2025

Non-finance companies enter the sector

Strong growth prospects in South Africa’s alternative lending sector are attracting telecoms and retailers.

In late 2023, Vodacom launched VodaLend Personal Loans in partnership with Old Mutual Finance, offering unsecured personal loans of up to ZAR 250,000 (US$14,000) through its digital app. This followed the August 2022 launch of VodaLend Cash Advance, providing customers with quick access to cash advances of ZAR 50 (US$2.8) to ZAR 500 (US$28) payable in seven to 28 days and available through the VodaPay super app.

Similarly, MTN South Africa teamed up with banking technology innovator Jumo in February 2024 to launch Qwikloan, offering short-term loans ranging from ZAR 250 (US$14) to ZAR 10,000 (US$563) to registered customers of its mobile money platform MoMo. In June 2025, MTN South Africa added home loans to its portfolio of lending products, enabling approval in under two minutes and offering features such as product comparison.

Grocery retail chain Pick n Pay has also entered the lending space, launching in July 2023 Mobicred and allowing customers to access revolving credit within 15 minutes. Pick n Pay is also partnered with PayJustNow to allow customers to buy high-ticket items, such as electronics, home appliances and mobile devices, and pay for them later. Customers are required to pay 34% of the item’s price upfront, with the remaining 66% split into two equal 33% installments, aligned with their subsequent salary dates.

The retailer also offers RCS Finance, providing loans of up to ZAR 250,000 (US$14,100) with repayment terms of up to 60 months.

Foreign finance providers target South Africa

In addition to native financial services companies, foreign players are also entering the market, attracted by South Africa’s significant pool of financially unbanked and underbanked population of about 3.9 million, growing adoption of digital finance adoption, and and 91% smartphone penetration.

Lithuania’s Aventus Group, which specializes in digital lending, established LendPlus in June 2023 to offer short-term loans of up to ZAR 4,000 (US$226) in South Africa with streamlined registration procedures and checks, and no collateral requirements.

Most recently, UK neobank Revolut revealed plans to enter the market, hiring in January 2025 Tom Morrison as the head of strategy and operations for South Africa. Morrison is the former chief operating officer of Adumo, a prominent South African payments company, and previously served as group executive for strategy and corporate development at Bayport Financial Services Group, a firm specializing in financial services and loan products for consumers in developing markets.

Revolut is one of the world’s largest digital bank, boasting more than 60 million customers globally. It offers products and services including checking accounts, savings accounts, domestic and international bank transfers, debit cards, credit cards, a stock and cryptocurrency exchange, and loans.

South Africa has one of the largest and most advanced fintech ecosystems in Africa. According to the European Investment Bank, the country ranks second on the continent for fintech company count, hosting 20% of all African fintech operators. MD Finance estimates that there are now 1,510 fintech companies operating in South Africa.