Vodacom Financial Services has launched VodaLend Cash Advance, a product that gives unbanked customers small cash loans.
In a statement, Vodacom says VodaLend Cash Advance is the latest product to be added to the VodaLend financial services suite, which includes VodaLend Compare, Voucher Advance and Airtime Advance.
The new addition is geared towards underbanked consumers who need quick and barrier-free access to funds, says the telco.
Available exclusively to Vodacom customers through the VodaPay super app, it notes the financial services offering forms part of the telco’s ambition, which includes accelerating financial inclusion for all South Africans.
JSE-listed telecommunications group Telkom Business recently launched its Telkom Lend product to enable small businesses to apply online for funding of up to R5 million and get an answer within 24 hours.
“With only 26 million South African consumers having a formal credit record, there is still a significant part of the population that doesn’t have access to formal financial services,” says Mariam Cassim, chief executive officer of Vodacom Financial Services.
“VodaLend Cash Advance provides affordable access to lending products for those who need these services most, but who have historically been prevented from doing so due to high fees and difficult-to-navigate paperwork. It is also accessed in-app on a trusted digital platform, enabling a seamless, convenient and secure process for customers.”
Vodacom customers can access a cash advance from as little as R50 and up to R500, with the option to settle it over seven, 14, 21 or 28 days.
In addition to the regulated requirements for affordability checks, the credit decision process is enhanced by also looking at a Vodacom customer’s recharge and payment behaviour.
Vodacom explains this ensures the service can be accessed by more people, including first-time borrowers who can now enjoy the benefits of a secure, regulated lending solution.
It adds that once approved, the money is advanced directly into the user’s VodaPay Wallet. It can be used instantly for in-app purchases, including buying prepaid electricity and water, paying bills, scan-to-pay in shops, and sending money to friends and family.
“This innovative product is a potential game-changer, as its fees are less than traditional short-term cash advance providers. On average, it’s up to 400% cheaper than using a mashonisa – it moves us beyond financial inclusion to real financial impact,” adds Cassim.
“Mashonisa” is an informal word for a person or company that provides loans to consumers.
Vodacom Group’s recent financial results for the year ended 31 March reveal growth for the telco’s new financial and digital services – up by 8.5% – and indicate that meeting this need is on a positive trajectory, says the telco.
“Since launch in October last year, our super app has attracted 2.8 million downloads, showing a huge appetite for participation in the digital economy. VodaLend’s product suite is also performing well; with the new Cash Advance offering I’m excited to see even more people enjoying financial freedom, across the board,” concludes Cassim.
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