Capitec CEO Graham Lee says the bank is making inroads in the informal and gig economy by opening up lending lines to businesses that previously had no access to lending.
In the year ended February 28 2026, Capitec’s business banking segment loan book grew 30% to R30.4bn, marking an extension of credit to the informal economy where merchants benefited from scored lending products.
Responding to questions by Business Times following the release of the group’s financial results, Lee said access to credit was a game changer for the informal economy, where there was ongoing economic activity.
“When a business that was previously invisible to the traditional credit system can suddenly access capital, you see what they are capable of,” he said.
Lee said activity in the informal economy was concentrated around informal traders, micro-retailers, sole proprietors and increasingly people operating in the gig economy.
“What they share is a need to accept more kinds of payments, access working capital quickly and separate their business finances from their personal ones. Those are the common threads we see across the base.”
What they share is a need to accept more kinds of payments, access working capital quickly and separate their business finances from their personal ones. Those are the common threads we see across the base.
— Graham Lee, Capitec CEO
Lee said for informal economy businesses, the loans were primarily used as working capital, buying stock and purchasing equipment.
“What we see consistently is that when a client starts accepting card payments, it creates a data trail that allows us to extend credit, and that credit then goes straight back into growing the business. In some cases, we have seen businesses triple in size on the back of that combination of better payment access and timely funding.”
Capitec’s scored lending book, which is automated and available to more people, ended the year at R3.1bn, up 118%, and is the fastest-growing part of its book.
Through the scored lending model the business banking segment grants merchant loans based on the turnover earned through their card machines. In return, Capitec keeps a percentage of the daily turnover to settle the loan, encouraging more clients to use Capitec card machines and converting them to card payments from cash.
“We are not in the business of making the comparison to the formal economy explicitly, but what we can say is that appetite from these clients, both to borrow and to grow, has been remarkable, and the credit performance has supported our continued expansion into the segment,” Lee said.
Research indicates that South Africa has an immense informal sector and township economy of around R900bn, mainly focused on retail and transport.
Capitec’s foray into the SME business sector faces stiff competition, with FNB having dominant market share.
Lee said Capitec targeted reducing the banking fee structure to make its business banking fees competitive with those in the personal banking unit and made banking simple for customers.
The bank said it had 78,000 unique clients that had opened entrepreneur accounts, showing strong uptake in the year under review.
Lee said the entrepreneur account is free for personal banking clients and enables them to add a card machine and qualify for credit based on turnover, with repayment made as funds flow in, known as “repay-as-you-trade”.
“This account bridges personal and business banking, helping sole proprietors and gig workers manage their finances separately. Early data shows clients are increasing revenue, expanding customer bases, and some are even tripling their businesses within months.”
Business Times
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