Com­ing up roses

Financial Mail - - FOX - Marc Hasen­fuss hasen­fussm@fm.co.za

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

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