oa Africa Insight - Micro lending at the crossroads

Volume 32, Issue 2
  • ISSN : 0256-2804



The micro lending industry has been identified as one of the growth areas in the financial services industry in South Africa, because of political pressure, increased demand from micro borrowers and the formal banking sector's lack of support for lenders and borrowers. However, the micro lending industry in South Africa is now at a crossroads. Various strategic issues such as the availability of funds to lenders, risk and outstanding debt considerations, increased government intervention, high-level legal action, the formation of the Micro Finance Regulatory Council (MFRC), possible maximum prescribed interest rates, technological requirements, and changing client preferences, demand that micro lenders reposition themselves to adapt to these changes and to become more competitive and relevant in the 21st century.

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