Vodacom has launched VodaLend Cash Advance, a product that allows its customers to take out small, short-term cash loans.
The mobile network operator said the addition is aimed at underbanked consumers who need fast, barrier-free access to funds.
The product will be available to Vodacom customers via VodaPay and offers cash advances between R50 and R500.
“Once approved, the money is advanced directly into the user’s VodaPay wallet,” Vodacom said.
“It can be used instantly for in-app purchases, including buying prepaid electricity and water, paying bills, scanning to pay in stores, and sending money to friends and family. family.”
Clients can settle the debt over seven, 14, 21 or 28 days.
Vodacom said it would use regulated requirements for accessibility checks while considering a customer’s charging and payment behavior in the credit decision process.
“This ensures that the service is accessible to more people, including new borrowers who can now enjoy the benefits of a secure and regulated lending solution.”
Cash Advance complements other VodaLend financial products including VodaLend Compare, Voucher Advance and Airtime Advance.
Voucher Advance allows users to purchase vouchers on credit to purchase products at stores including Nando’s and Hirsch’s, while Airtime Advance allows customers to purchase airtime on credit.
The latter has proven incredibly popular, with Vodacom’s latest annual results showing the product accounted for 45.2% of all total prepaid charges, amounting to R13 billion.
Mariam Cassim, CEO of Vodacom Financial Services, said VodaLend Cash Advance aims to help millions of South African consumers without a formal credit history.
“With only 26 million South African consumers having a formal credit record, there is still a significant portion of the population that does not have access to formal financial services,” Cassim said.
“VodaLend Cash Advance provides affordable access to loan products for those who need these services the most, but have historically been prevented from doing so due to high fees and difficult-to-navigate documents.”
Vodacom did not provide details on the interest rates it charged on its cash advances, but Cassim said the product was a potential “game changer” as its fees were lower than those of traditional providers. short-term cash advances.
“On average, it’s up to 400% cheaper than using a mashonisa – it takes us beyond financial inclusion to real financial impact,” Cassim said.