Overview

Over three billion people in developing countries are still without effective access to loans and deposit services. The problem is particularly acute in Sub-Saharan Africa, where only between five and twenty-five percent of households have a formal relationship with a financial institution. The region is also home to just two percent of the world’s microfinance institutions. Lack of access to financial services is therefore one of the largest constraints to private sector development in Africa. Addressing this shortfall requires creating new institutions and building operational and managerial capacity from the ground up.

LoanCo’s strategic intent is to expand our footprint into commercially viable microfinance institutions and broaden access to financial services so that the people in these regions can access the financial services, they need, to thrive. LoanCo will develop these new markets and develop our capacity through:

    • Equity investments
    • Debt instruments
    • Credit guarantees
    • Fund structuring
    • Microfinance structuring
    • Generic growth

As we rebuild from the pandemic, we must prioritize the stability and resilience of local economies. Economic resilience starts with ensuring the financial health and well–being of individuals, households and small businesses we serve. LoanCo will provide key services, tools, products and capital to help clients weather volatility, save for the future and invest in growth. LoanCo will focus on the financial health of their customers, increase customer loyalty and build a more robust client base that will lead to longer term sustainability for the businesses.

Timeline

Products

LoanCo’s strategy is to establish itself in the Zambian payroll market, with South Africa as a base for fundraising, strategic oversight and planning. Once LoanCo Zambia has established itself in the payroll market it plans to venture into alternative finance products such as debit order loans and other consumer loan products. LoanCo’s future plans are to establish operations in other Southern African countries, such as Mozambique, in order to balance its portfolio and reduce overall investment risk.

Consumer Loans Products
Payroll Loans (Current Products)
Debit Order Loans

For personal consumer needs, we offer secured loans to customers who plan to finance goods such as vehicles or other movable assets. This could also be short term loans in the form of bridging, discounting or purchase order loans. These loans are flexible and allows the consumer easy access to capital when required.

A payroll loan is granted to formally employed customers using their monthly income as collateral. Affordability is calculated in accordance with strict criteria in accordance with the employer’s affordability rules. This ensures sustainable lending practices which is good for both the lender and the consumer.

Debit order collection from consumers poses a higher risk to the lender as consumers have to manage their own finances to ensure they are able to repay their loan obligations. Strict vetting criteria and shorter loan terms are generally used to mitigate this risk and in some cases also higher cost of credit. Credit bureau information in the countries where LoanCo operates is limited, making these loans more challenging, but this is being addressed by the regulatory authorities and LoanCo anticipates large growth in this segment in the future.

Consumer Loans Products

For personal consumer needs, we offer secured loans to customers who plan to finance goods such as vehicles or other movable assets. This could also be short term loans in the form of bridging, discounting or purchase order loans. These loans are flexible and allows the consumer easy access to capital when required.

Payroll Loans (Current Products)

A payroll loan is granted to formally employed customers using their monthly income as collateral. Affordability is calculated in accordance with strict criteria in accordance with the employer’s affordability rules. This ensures sustainable lending practices which is good for both the lender and the consumer.

Debit Order Loans

Debit order collection from consumers poses a higher risk to the lender as consumers have to manage their own finances to ensure they are able to repay their loan obligations. Strict vetting criteria and shorter loan terms are generally used to mitigate this risk and in some cases also higher cost of credit. Credit bureau information in the countries where LoanCo operates is limited, making these loans more challenging, but this is being addressed by the regulatory authorities and LoanCo anticipates large growth in this segment in the future.