Deposit4U founder profits from setback
Helps young professionals secure short-term loans
THE “wounded healer” phenomenon is one of the most romanticised concepts in psychology, describing how a wounding experience can lead to particular career choices.
For Andile Nomlala, his “wounding experience” became a business opportunity.
He founded a financial services provider that offered short- term loans to cover upfront deposits and administration costs for rental accommodation because he knew first-hand what it was like.
Targeting young professionals, Deposit4U was conceived as a vehicle to helping young graduates secure their own accommodation so they could focus on their work.
It is a situation Nomlala understands only too well.
“I come from Mthatha in the Eastern Cape. I studied investment and finance at the University of the Western Cape and did both my Honours in management practice and executive Master’s in business administration at UCT.
“I lived in the township, far from where I worked and didn’t have access to the resources I needed for my first flat, transport and a suit,” he said.
Nomlala has served in leadership structures of the Western Cape’s Black Management Forum (BMF) from Student Chapter level until becoming provincial chairperson.
Next month, his three-year term as chair ends.
In 2014, he set up Deposit4U. “My friends were borrowing money from me because I had other businesses and was a lot more liquid than they were.
“I realised it was always for the same reason: to pay deposits on their accommodation. I understood the desperation. Estate agents and landlords won’t give you the keys without you paying a double deposit, which is required in Cape Town. Corporates don’t help you with start-up payments: as a new employee you have to wait.”
But waiting is not an option when you’re a young graduate professional already on the back foot: living far from the office, dependent on public transport so you arrive late and leave early, with no professional wardrobe, and then you still need to eat.
“I’ve seen how the business helps from a social perspective.
“If you graduate now and you have to live with relatives in the townships, you’re at a huge disadvantage.
“Once your superiors have that perception of late-coming, you’re not making a good impression and you’re not going to thrive in your position. Living close to the office is crucial to give graduates that boost so they can leave the office at 7pm or 8pm, which makes a huge difference.”
Having accommodation settled allows you to focus on the rest: making a good impression at work, arriving early and putting in longer hours, and securing a permanent position, he says.
Deposit4U was self-funded initially, with start-up capital of R150 000.
It pays the landlord or agent the deposit, admin fees and key deposit, which are repaid over 12 months, with interest. Deposit4U also offers legal advice on tenant rights and represents their clients should legal disputes arise over deposits.
Two months into the business, Nomlala knew this was getting too big – demand far outstripped his capabilities, so he approached his mentor, Simon Susman, the chairperson of Woolworths, for investment capital.
Instead, Susman became an equity partner.
“He gave me extra capital for my business to thrive.
“The demand and clientele has grown exponentially.”
With about 3 000 clients and loans averaging R8 000, he says his total loan book is R25 million. But business is primed for growth and Nomlala is in talks with other major investors.
“Eventually, I foresee Deposit4U helping with the entire start-up capital – the bed, fridge, laptops etc so you’re ready to start work,” he said.
Deposit4U is not his only business interest: he’s invested in Cape Executive Parking – a valet parking business and car wash service at Cape Town International Airport; a retail fund that invests in small and medium-size businesses that supply big retailers; a franchise partnership with the restaurant chain, Bootlegger Coffee Company; and investments in industrial property and student accommodation.
He’s also the executive chairperson of Ngwayibanjwa Group, which houses all his interests. For Nomlala, it’s never going to be about business as usual.
It’s about coming up with business initiatives that simultaneously create opportunities for others to thrive.
Because no one knows the plight of a young professional better than someone who can truly say: been there, done that.
Successful entrepreneur Andile Nomlala.