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Fintech lender throws SA’s SMEs a trade finance lifeline

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 03 Aug 2021
Eli Michal, CEO of Payabill.
Eli Michal, CEO of Payabill.

Fintech lender Payabill has enhanced its business portfolio and will offer international trade finance to local small and medium enterprises (SMEs).

Payabill is a 100% digital lending business that provides working capital and trade finance to small businesses.

In a statement, the fintech firm points to the struggle South African SMEs experience in accessing international trade finance, saying the process is often complicated and requires knowledge of regulation, compliance and forex.

In addition, small businesses sometimes do not meet the credit requirements of banks and other specialised firms, especially with respect to international trade finance.

The company says international trade finance can help businesses increase revenue, decrease competition, create easier cashflow management and benefit from currency exchange if bought at the right time at fixed costs.

Eli Michal, CEO of Payabill, explains: “We were established in 2017, and have been providing trade finance to SMEs by settling our clients’ suppliers directly and allowing clients to select their own extended payment terms. We had constant requests from SMEs for support of finance imports.

“We were able to collaborate with our equity partner’s Sasfin Forex division to develop a bespoke credit offering. It allows SMEs to access this vital funding to provide international working capital solutions to grow their businesses. Our offering is 100% digital, fast and compliant. Clients choose how often they wish to make payments and over what time period so that they don’t take on any additional strain.”

According to Michal, to be eligible for this type of finance, SMEs must have been operating for more than a year, be registered as a close corporation or proprietary company, and have an annual turnover of between R500 000 and R30 million.

Payabill’s international trade finance settles international suppliers from R5 000 up to R500 000 or higher, he states.

“We take risk where it matters at the coalface of SA’s businesses by helping smaller businesses that have little security and struggle to get funding. We pay suppliers when sales aren’t yet guaranteed and take risks where no one else would consider it. We are intent on helping those businesses that are locked out of the market at a time when SA businesses need all the support they can get.”

The fintech firm allows a business to settle an international supplier and negotiate suitable terms of up to 90 days, accepting pro forma invoices for immediate settlement.

Payabill says it’s paid almost 500 suppliers by offering various forms of trade finance, to date.