South Africa’s small business lending market is showing tangible signs of recovery. Data from alternative funder GroWise Capital points to rising approval rates, improving credit quality, and growing demand from sectors that have traditionally relied on bank finance, a shift the company links to five consecutive quarters of GDP growth and a sustained interest rate cutting cycle.
Repayment performance across GroWise’s portfolio has improved over the past 12 months, including in higher-risk credit segments. The average deal size has grown 15% over the last six months, average loan terms are longer, and refinanced clients are qualifying for larger facilities.
Jonti Strimling, co-founder and Chief Risk Officer at GroWise Capital, said the improvement is coming from both sides of the credit equation. “We are seeing a dual effect. Applicants are bringing better credit histories to the table, and businesses with higher-quality credit profiles are recognising the value of approaching GroWise for funding,” he said.
The company has also recorded a notable uptick in return clients, borrowers who were previously funded, paused, and have since come back with stronger financials. Stable refinance approval numbers suggest sustained repayment performance over time rather than a one-off improvement.
Healthcare, professional services, construction, manufacturing, logistics, and energy supply are among the sectors now actively seeking alternative funding outside traditional bank channels. The trend is notable given that Stats SA data shows the electricity, gas, and water sector contracted 4.3% and construction by 4.4% in recent periods.
Strimling argued that pressure within a sector increases rather than reduces demand for flexible capital. “Businesses in these sectors are thinking strategically about their funding mix. Industries exposed to commodity and import/export price volatility need a funder that can respond when market conditions shift,” he said.
Continued interest rate reductions have eased debt serviceability and supported consumer spending — improvements that GroWise says are feeding directly into application quality and portfolio performance.
“Improved macroeconomic conditions, combined with a maturing approach to alternative funding, are creating a new generation of well-capitalised, growth-focused SMEs,” Strimling said.
GroWise Capital provides business funding between R15,000 and R3 million, with no collateral requirement, disbursed in under 24 hours.
Original article by Africa Business Communities. Read the full article by clicking here.