Yoco's $100M Credit Facility Signals South African Fintech Pivot

Yoco has secured a $100 million credit facility from Victory Park Capital, a United States investment firm, to expand its merchant cash advances business — the latest sign that South Africa's fintechs are moving beyond payments into financing.

The company has advanced more than R6.5 billion ($395 million) to over 40,000 merchants since 2018, working with specialist credit providers. The new facility gives Yoco greater control over pricing and risk in its cash advances operation, rather than depending on outside credit partners.

The target market is enormous. The 2025 Finfind and African Bank SA MSME Access to Finance Report estimates South Africa's small-business financing gap at R350 billion ($21.3 billion). SMEs receive just 13% of national bank lending, compared with 51% for large corporations. For fintechs, that gap is a chance to build new revenue streams around customers they already serve.

How does data-driven lending actually work?

Yoco assesses merchants using their own sales data and presents funding offers through its app. Advances range from R2,000 ($122) to R1.5 million, and repayment comes out of daily takings rather than fixed monthly instalments.

That's the structural difference from banks. Traditional lenders rely on credit histories, payslips and collateral. A payments platform can watch how a business trades day to day, how sales fluctuate, and whether revenue can support financing. That visibility can identify viable businesses that lack the formal documentation conventional banks demand.

Who else is chasing the same customers?

Optasia, which built its business on airtime advances distributed through telecom operators, is shifting toward broader microfinance for consumers and small businesses. The company generated $270 million in revenue during the first nine months of 2026, up 45% year-on-year. Microfinance contributed $194 million — roughly 72% of group revenue — as Optasia pursues a target of deriving more than 80% of revenue from these services.

Optasia says its technology, built on alternative data and artificial intelligence, assesses not only whether customers qualify but how much they can realistically afford to repay.

Paymenow, an earned-wage access and employee financial wellness fintech, approaches the problem from the payroll side. By 2026, it reported serving more than 750,000 employees across South Africa, Namibia, Zambia and Pakistan. Its May merger with PayCurve broadened the offering beyond wage access to include debt rehabilitation, savings and financial education.

What does this change for borrowers?

The demand is real, and so is the risk. FinMark Trust found that 75% of South Africans who borrowed in 2024 used credit to cover essentials such as food. Nedbank's 2024 Financial Health Monitor found that 10% of workers had turned to payday lenders to manage financial stress, while 12% had borrowed from informal lenders.

For a worker facing an unexpected expense, accessing wages already earned may beat expensive short-term borrowing. But its long-term value depends on whether it improves financial management or simply shifts pressure to an earlier point in the month. The same logic applies to merchant advances: flexible repayment tracks sales, but deductions from daily takings can leave less for stock, wages and operating costs when revenue dips.

Can the economics hold?

Financing is harder than payments. Capital has a cost, defaults erode returns, and data cannot eliminate uncertainty when household budgets and small-business revenues stay under pressure.

Yoco says it has not recorded an unprofitable cohort of cash advances since 2018, including through the Covid-19 pandemic. But it has not disclosed cohort-level performance figures, default rates or write-offs alongside the latest facility announcement. Those details will matter as the business scales — and the same scrutiny applies to Optasia's microfinance push and Paymenow's broader workplace services.

South Africa's fintechs have made financial services more accessible. Their next test is turning that access into sustainable businesses — because for a merchant restocking shelves or a worker counting down to payday, success isn't another transaction. It's having enough money to keep going.