South Africa’s fintechs have spent years making it easier to move money. Now they want to help people and businesses access it when they need it most.
Yoco’s $100 million credit facility from Victory Park Capital, a United States investment firm, is the latest sign of that shift. The South African payments and fintech company is expanding its cash advances business, betting that transaction data can help it finance small businesses that traditional banks struggle to assess.
The opportunity is substantial. But financing requires more than customer numbers and transaction volumes. It demands capital, risk management and the ability to finance responsibly to customers whose financial circumstances can change quickly.
The next phase of South Africa’s fintech boom will depend on whether companies can turn transaction data and customer relationships into sustainable financing businesses. South Africa’s fintech giants, Yoco, Optasia, and Paymenow, are pursuing this opportunity from different angles, responding to a common problem: consumers and small businesses need more than payment services to manage their finances.
South Africa fintechs move beyond payments
For Yoco, financing extends its relationship with independent businesses through card machines, point-of-sale software and online payments.
The company has advanced more than R6.5 billion ($395 million) to over 40,000 merchants since 2018, working with specialist credit providers. Its new facility is expected to give it greater control over the pricing and risk of its cash advances operation.
Yoco uses sales data to assess merchants and present funding offers through its app. Advances range from R2,000 ($122) to R1.5 million, with repayments deducted from daily takings rather than fixed monthly instalments.
The model reflects a broader shift in how fintechs assess borrowers. Traditional financial institutions often rely on credit histories, payslips and collateral. Payment platforms, however, can observe how businesses trade, how sales fluctuate and whether revenue can support financing.
That information could help identify viable businesses lacking the formal documentation conventional banks require.
The opportunity is significant. The 2025 Finfind and African Bank SA MSME Access to Finance Report estimates South Africa’s small-business financing gap at R350 billion ($21.3 billion). Small and medium-sized enterprises receive just 13% of national bank lending, compared with 51% for large corporations.
For fintechs, the gap offers an opportunity to build new revenue streams around customers they already serve.
A bigger market, a bigger responsibility for fintechs
Yoco is not alone. Optasia, which built its business around airtime advances distributed through telecommunications operators, is shifting towards broader microfinance services for consumers and small businesses.
The company generated $270 million in revenue during the first nine months of 2026, up 45% year-on-year. Microfinance contributed $194 million, or approximately 72% of group revenue, as Optasia pursued its ambition to derive more than 80% of revenue from these services.
Its expansion illustrates how alternative data and artificial intelligence are becoming central to digital finance. By analysing behavioural patterns and transaction signals, fintechs can assess customers with limited formal credit histories.
But identifying a potential borrower does not automatically mean financing is affordable or appropriate.
Optasia says its technology assesses not only whether customers qualify but also how much they can borrow and realistically afford to repay.
That distinction matters in a market where financial exclusion and vulnerability often coexist. FinMark Trust found that 75% of South Africans who borrowed in 2024 used credit to cover essentials such as food. Nedbank’s 2024 Financial Health Monitor found that 10% of workers had turned to payday lenders to manage financial stress, while 12% had borrowed from informal lenders.
The figures highlight demand for short-term financial support, but also the risk that financing could deepen the pressures it is meant to ease.
The cost of accessing money
Paymenow, an employee financial wellness and earned-wage access fintech, approaches the problem differently, allowing employees to access wages they have already earned before payday.
By 2026, the company reported serving more than 750,000 employees across South Africa, Namibia, Zambia and Pakistan. Its merger with PayCurve in May broadened its offering beyond wage access to include debt rehabilitation, savings and financial education.
The expansion reflects a wider understanding of financial inclusion. Giving customers access to money is one thing; helping them manage it is another.
For workers facing unexpected expenses, accessing earned wages may offer an alternative to expensive short-term borrowing. But its long-term value depends on whether it improves financial management rather than simply shifting pressure to an earlier point in the month.
The same applies to merchant cash advances. Flexible repayments can help businesses manage fluctuating sales, but deductions from daily takings may also leave less money for stock, wages and operating costs when revenue falls.
Can the fintechs’ economics hold?
Fintechs already have customer relationships, transaction data and digital distribution networks. Financing can deepen those relationships while creating revenue beyond payments.
But the economics are more complicated than identifying demand. Capital has a cost, defaults erode returns, and data cannot eliminate uncertainty when household budgets and small-business revenues remain under pressure.
Yoco says it has not recorded an unprofitable cohort of cash advances since beginning operations in 2018, including during the Covid-19 pandemic. However, it has not disclosed cohort-level performance figures, default rates or write-offs alongside its latest facility announcement.
Those details will become important as the business scales. The same scrutiny applies to Optasia’s microfinance expansion and Paymenow’s broader workplace financial services.
South Africa’s fintechs have made financial services more accessible. Their next test is whether they can turn that access into sustainable businesses. For a merchant waiting to restock or a worker counting down to payday, success is not another transaction. It is having enough money to keep going.