- Vodacom customers can now access quick, small loans from R50 to R500 via VodaLend Cash Advance.
- It says its fees are 400% cheaper than a mashonisa or a loan shark.
- Users can repay the cash advance in seven, 14, 21, or 28 days.
Network operator Vodacom has launched a lending product offering quick, small loans from as little as R50, that's fees are also much cheaper than a mashonisa or a loan shark, it says.
Vodacom customers can now access a cash advance from R50 to R500 and settle it over four different payment terms. Customers may opt to repay the funds in seven, 14, 21, or 28 days.
Its fees are cheaper than traditional short-term cash advance providers and, on average, 400% cheaper than a mashonisa or a loan shark, Mariam Cassim, CEO of Vodacom Financial Services, said.
The new VodaLend Cash Advance product is targeted at its underbanked customers and offers access to quick and secure cash, void of barriers associated with accessing unsecured lending.
"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," Cassim said.
Cassim said that despite 26 million South African consumers having formal credit records, there was still a significant chunk of the population without access to formal financial services.
As part of the approval process, VodaLend Cash Advance uses its customers' recharge and payment patterns and behaviour to determine their level of affordability.
The company said that would ensure that the lending solution can be accessed by more people, including first-time borrowers, who can now access regulated credit.
The product is a new addition to its VodaPay super app, launched by Vodacom last year.
Once the loan is approved, the money is advanced directly into the Vodapay user's digital wallet, which can instantly be used for in-app purchases such as buying electricity and paying utility bills. Customers can also scan to pay in shops and send money to friends and family.
Since launching the VodaPay super app, the telco has drawn 2.8 million downloads.