South African fintech Lula lands R340m to scale SME working capital
· TechCentral
South African fintech Lula has secured a R340 million investment from the Netherlands Development Finance Company (FMO), a move that is expected to accelerate the firm’s expansion amid growing demand for alternative working‑capital solutions for small and medium‑enterprise (SME) owners. Lula, which launched in 2020, offers a digital platform that connects SMEs with a network of lenders, enabling businesses to access short‑term credit quickly and at competitive rates. The new capital will be deployed to broaden the company’s product suite, enhance its risk‑assessment algorithms, and scale its operations across the country, particularly in underserved regions where traditional banks have limited reach.
FMO’s funding underscores the increasing interest from international development finance institutions in South Africa’s fintech ecosystem, which has been praised for its potential to boost financial inclusion and stimulate economic growth. Lula’s CEO, Thabo Mokoena, noted that the infusion will allow the company to invest in advanced data analytics and machine learning tools to better assess borrower creditworthiness, thereby reducing default risk and expanding credit availability. Analysts suggest that the partnership could position Lula as a key player in the SME financing market, which is projected to grow as the government and private sector push for more inclusive financial services. With the new capital, Lula aims to double its loan portfolio within 18 months, supporting thousands of SMEs that rely on timely working capital to sustain operations and drive job creation.
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