Rand Merchant Bank (RMB) and Standard Bank have backed SME-focused fintech Bridgement with R330 million to expand its online AI-powered business loan platform.
The funding will be used to scale Bridgement's direct lending to SMEs and strengthen its position in the market, the company says.
According to the banks, SA’s SME sector contributes approximately 40% of the country’s GDP and employs around 60% of its workforce. However, the sector faces a funding gap estimated at between R350 billion and R386 billion.
Credit assessments have traditionally relied on audited financials, collateral and consistent cashflow visibility, making it difficult to assess businesses that operate differently or lack readily available financial records. As a result, many South African businesses are unable to meet these requirements.
The banks and Bridgement will focus on approving business funding at speed and scale without extensive reliance on traditional collateral, which has been an obstacle to SME funding.
Bridgement says it will fund SMEs based on data generated through their normal operations. Data from bank accounts, accounting software and other digital financial sources provides a more accurate and up-to-date picture of a business’s creditworthiness. The fintech’s AI platform establishes a real-time view of an SME’s performance and cashflow by analysing thousands of financial and operational data points, enabling faster and more accurate credit decisions than traditional lending processes.
Daniel Goldberg, founder and CEO of Bridgement, says SMEs don't need more paperwork – they need faster access to capital. "By using AI to analyse live financial data instead of relying solely on traditional lending processes, we're helping more businesses access the funding they need to grow.”
Xolela Albert, leveraged finance lead transactor at RMB, says the bank has been a funding partner to Bridgement for several years and has seen the business consistently execute on its vision of improved financial inclusion in SA.
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