RainFin facilitates lending between lender and SME borrowerJun 2, 2016 RainFin In the news RainFin , SME
RainFin CEO, Sean Emery’s interview with Lynette Ntuli on SME Funding continues the talk about the underfunded SME market. It was discussed that South Africa has a fairly informal lending culture as well as limited funding options. Over 80% of SMEs obtain funds from their friends and family to start their business.
Besides friends and family, there are individuals who want to contribute towards the growth of the South African economy by funding SMEs, however, there has not been a lending platform or a marketplace for them in order to do that. RainFin formalises this by facilitating the transaction between the lender and the SME borrower via its platform, which is commonly known as crowdfunding.
Emery goes on to explain that the term crowdfunding in South Africa has many different sectors. However the sector which RainFin fits into is the formal lending agreement sector.
RainFin assesses the business application and completes the processing as well as the credit scoring. The application is then assigned a risk grading and placed on the online marketplace. This particular grading will provide the lender an indicative interest rate. The lender is first and fundamentally able to choose their risk profile as well as the sector of the SME which they would like to fund.
RainFin validates the transaction with a loan agreement which provides the SME the opportunity to repay their loan over 12 to 48 months. The repayments include the capital and interest portions and go directly to the respective lenders.
Please click the link to see the full video and more clips on SME funding.