Coming up roses
Anglo African, which made headlines in 2002 when it made an unsuccessful play for liquor group KWV, is now making huge strides in backing a lending venture that services small to medium enterprises (SMEs).
Anglo African — controlled by JP du Plessis, with banking personality GT Ferreira as a shareholder — launched online business lender Pollen roughly a year ago. Pollen is the brainchild of Du Plessis’ younger brother, Louis, who also manages the business.
Lending activity, despite the sluggish local economy, has been surprisingly brisk. Pollen initially set a target of R20m in loans in its first year of operation, but has managed to write loans worth R150m.
JP du Plessis says about 70% of the loan book is repeat business, and he reckons Pollen can push its loan book to between R300m and R400m next year.
The business, in many ways, replicates the business models of fintech giants like New York Stock Exchange-listed OnDeck in the US and Moula in Australia.
The loans are unsecured, but Pollen tends to back cash generative businesses that are able to meet weekly repayment arrangements. Interest rates are set at about 25%.
JP du Plessis points out that SA led the way with innovative personal loans to individuals through initiatives such as Capitec and Wonga. But it lagged behind when it came to unsecured business loans to the SME market.
Pollen’s advantage is offering business owners fast loans via an online application and vetting platform, which can deliver business loans to SMEs within three days. Business loans range between R50,000 and R1.5m.
Louis du Plessis believes the local market for online lending could be huge, with 1m registered companies. “The market might be as big as R180bn/year for SME financing in SA.”
So far, bad debts are within the “ball park”. It’s probably too early to discern any patterns yet.
Louis du Plessis says Pollen has the capacity to expand its loan book up to R500m before looking at securing more funding lines or raising capital.
GT Ferreira Expanding into online lending