Yoco has advanced more than R6.5 billion to over 40,000 merchants since 2018, and that number is about to grow. The South African payments company recently secured a $100 million credit facility from U.S. investment firm Victory Park Capital, a move that signals something bigger than a funding round. It marks a deliberate pivot toward becoming a lender, not just a payments platform.
The logic behind the shift is straightforward. Traditional banks lean on credit histories, payslips, and collateral to decide who gets financing. Yoco already knows how its merchants trade: how sales move, when revenue dips, and what a business can realistically repay. Using that transaction data, the company presents funding offers directly through its app, with advances ranging from R2,000 to R1.5 million and repayments drawn from daily takings rather than fixed monthly instalments. The new facility is expected to give Yoco more control over the pricing and risk of those advances.
Yoco is not alone in spotting this opportunity. Optasia and Paymenow are also chasing the same gap from different directions, each responding to a shared reality: consumers and small businesses across South Africa need more than a way to send and receive money. They need access to capital when things get tight, and the fintech companies sitting on years of customer data are increasingly well-placed to provide it.
The harder question is whether turning that data into a sustainable lending business is as clean in practice as it looks on paper. Financing demands serious risk management and the discipline to lend responsibly to customers whose circumstances can shift quickly. South Africa's fintech boom has built impressive customer numbers. The next chapter will show whether those numbers can support something more durable.
Originally published by TechCabal.