Vodacom is pushing further into the financial services industry. The company has launched VodaLend Cash Advance, which allows its customers access to small, short-term cash loans. This new addition to its financial services is targeting South Africa’s underbanked consumers who need access to quick, frictionless cash. The cash advance service is available through their VodaPay app and offers cash advances between R50 and R500.
“Once approved, the money is advanced directly into the user’s VodaPay Wallet,” Vodacom said. “It can be used instantly for in-app purchases, including buying prepaid electricity and water, paying bills, scan-to-pay in shops, and sending money to friends and family.” The cash advance loans are available over a 14, 21 or 28 day period, at which point the entire balance is to be settled.
Vodacom believes it is also a way for consumers to build up a credit record, as many credit providers are too risk averse to lend to the customers that VodaLend Cash Advance is targeting. It still abides by all the credit regulations in the country, including affordability checks, while also considering a customer’s recharge and payment behaviour in the credit decision process. “This ensures that the service can be accessed by more people, including first-time borrowers who can now enjoy the benefits of a secure, regulated lending solution,” the company said.
“With only 26 million South African consumers having a formal credit record, there is still a significant part of the population that doesn’t have access to formal financial services,” said Cassim. “VodaLend Cash Advance provides affordable access to lending products for those who need these services most, but who have historically been prevented from doing so due to high fees and difficult-to-navigate paperwork.”
“On average, it’s up to 400% cheaper than using a mashonisa – it moves us beyond financial inclusion to real financial impact,” Vodacom Financial Services CEO Mariam Cassim said.