Helping the cash-strapped
Cash flw is a challenge to the working class and to those operating businesses in the curent economic climate. People ofen fail to manage their mid-monthly expenses due to unforeseen circumstances. In the process, they are unable to save and invest. Borrowers prefer the convenience and immediacy of credit cards or payday loans to micro loans.Mohamed Makanda Rasivhetshela saw a need for an online micro financing business, povide ordinary people with loans in tigt times. Maanda Finance ofers short-term loans from R100 to R500 through an online application ystem. Their “loans have had the lowest interest rates since 2010”. Rasivhetshela says so far they have paid out R10m worth of loans in total. They also ofer investment opportunities fom R50 to any amount, claiming 1.2% compound interest per month.
From borrowing money to lender
Rasivhetshela was born in Tanzania and relocated to SA in 1999. He always had an interest in business. At school he sold sweets for pocket money. In 2010, his brother convinced him to start lending people money. A friend loaned Rasivhetshela R1 500 to get the business off the gound.Rasivhetshela struggled to preserve profiability and to keep the business running. He needed a lucratie investment to make the business work and came up with an investment plan. “I needed to come up with a plan to make people invest and not call it a scam.” To raise the capital, he had an investment plan to inject cash flw. “We started approaching people to invest whatever they could in return for a monthly payout.”Going digital to grow the business Makanda is currently operating fom their office in etoria. They unlock a database of 6 000 clients natiowide. “You can apply for loans on an app, using your phone. You don’t have to come to our office.
Micro financing challenes
Running a finance business an be daunting in the curent economic climate. Companies using a debit order system are feeling the pinch while banks are benefiting millions ofands. “What people don’t understand is that, every time ou reverse money (from banks), you go deeper into debt.”According to the OEC Observer, an estimted 190 million people are funding activities tough microfinance. Hwever, 500 million micro entrepreneurs are still xcluded from penetrating marets and only a few are developing an integrated approach in collaboration with other ole players. The priority for the other MFIs in many cases is still o consolidate their growth and increase their scope of service. Broadening the scope of microfinance intitutions depends otechnological innovation. Rasivhtshela says through their digital penetration, thy have been able to assist thousands.
Providing a solution
Rasivhetshela is passionate about assisting people though financingand investin, even if not particularly pofiting om the business. He recalls how he used to earn R50 a month when the business went through its start-up phases.He hopes to assist and educate more people about their financialoptions and o build a reputable credit record through Makanda Finance.
