Genfin Holdings has announced a new partnership with the Family Office Group Solutions business unit of Rand Merchant Bank (RMB), a division of FirstRand Bank, to improve access to working capital for South Africa’s small and medium-sized enterprises (SMEs).
The partnership sees RMB, alongside key family office clients, acquire a 20% minority equity interest in Genfin Holdings and extend the group’s unsecured lending capacity via its subsidiary, Genfin Business Finance.
SMEs represent 98% of businesses in South Africa, contributing about 40% to the country’s GDP and employing up to 60% of the workforce across all sectors (McKinsey & Company, 2020). Despite the sector’s significance, access to finance remains a challenge.
This transaction empowers Genfin Business Finance to offer unsecured lending solutions, enabling underserved SMEs and mid-corporates to obtain working capital without requiring collateral for scaling and enhancing their competitive edge.
Provided loans are issued based on affordability, with flexible terms and generous repayment periods, the added financial resources equip SMEs to pursue growth opportunities, foster innovation and adapt to market changes. It significantly enhances their capacity to fund local or international expansion, enhance operational efficiency and facilitate technology adoption.
With RMB’s investment and support, Genfin Business Finance is primed to serve a wider pool of SMEs and mid-corporates. The financing fintech’s capacity to scale funding support is underpinned by its automated credit risk model that mobilises faster credit decisions based on 12 months’ financial data. Genfin Business Finance believes that with the proper financial support, SMEs present the most significant untapped potential for stimulating job creation and socio-economic growth in South Africa. The partnership with RMB is poised to cultivate a more resilient and diverse SME sector.
Deep relationship
Genfin Business Finance CEO Jaco Erasmus said: “Over the past seven years, we’ve witnessed firsthand how swift access to flexible working capital funding empowers SMEs to innovate and grow. Together with RMB, we look forward to supporting more SMEs to realise their ambitions with sustainable funding that prioritises cash flow and long-term business health.”
Family Office Group Solutions’ Hugo le Roux added: “We have built a deep relationship with the Genfin Holdings group, its founders and experienced management team via its shareholders, who are long-standing clients and trusted partners with RMB.
“Genfin Business Finance has demonstrated significant credit risk management experience in the unsecured SME lending space. Their risk models and operational processes have proven robust despite challenging market conditions and major credit events in recent years.
“As proudly South African companies, our joint prerogative is to positively contribute to our financial landscape and add value to society. In partnership with the Genfin Holdings group and Genfin Business Finance, we can apply our collective clout to help more SMEs grow, create jobs and benefit the broader economy.”
About Genfin Business Finance
Established in 2016, Genfin Business Finance (Genfin) is a fintech lending business and part of the Genfin Holdings group, an investment holding company specialising in SME and consumer lending in South Africa. Based in Cape Town, Genfin Business Finance is a proudly South African company that enables and supports SMEs and mid-corporates with flexible funding that unlocks growth for sustainable success. Using innovative technology, Genfin provides funding to thousands of businesses in approval times rarely experienced in the traditional lending landscape. For more, visit www.genfin.co.za.
About Jaco Erasmus
Jaco Erasmus joined Genfin Group in 2021 to spearhead the provision of smarter, faster and more flexible alternative leading solutions for South Africa’s SMEs and mid-corporates. A seasoned corporate and investment banking professional, Erasmus has spearheaded some of South Africa’s most prominent corporate and investment deals. He launched his banking career working for a number of local and international groups in London before spending a near decade as director and corporate coverage head at global banking group HSBC in South Africa.
Over more than 20 years working at the forefront of banking and lending in South Africa, Erasmus has an innate understanding of value creation within the banking industry and the power of technology and big data to break down traditional barriers. He is a staunch believer in the transformative potential of SMEs and mid-corporates to power economic growth and tackle challenges in South Africa.
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