Lula secures $10M IFC loan to expand SME lending in South Africa

Lula, the South African digital lender formerly known as Lulalend, has secured a 170 million rand ($10 million) local-currency loan from the International Finance Corporation (IFC). The facility will expand access to finance for micro, small, and medium-sized enterprises (MSMEs) across the country.

Founded in 2014 by Neil Welman and Trevor Gosling, Lula provides fast, unsecured working-capital loans of up to ZAR 5 million (about $280,000). The Cape Town-based fintech focuses on financial inclusion. Today, around 90% of its customers are businesses borrowing for the first time.

IFC said the new loan will use Lula’s digital lending model to reach more underserved businesses. It also supports IFC’s wider push for local-currency financing in Africa. Many businesses earn in rand but face dollar-denominated debt, which exposes them to currency risk. A rand-based facility reduces that pressure.

This is not IFC’s first support for the company. In 2019, Lula received $6.5 million from IFC and U.S. venture capital firm Quona Capital to strengthen its balance sheet and grow its loan book. That partnership helped Lula expand its digital credit offering to thousands of SMEs.

South Africa’s small-business sector remains a critical engine of growth. MSMEs account for 34% of GDP and 60% of jobs. Yet only 5% of formal small businesses can access bank credit. The new IFC facility is expected to help close this gap by enabling more small firms to secure the financing they need to grow.

CEO Trevor Gosling said the partnership would allow Lula to reach more small businesses at scale. “When small businesses thrive, our entire economy moves forward,” he said.

The new loan positions Lula to support job creation, strengthen resilience among small firms, and advance inclusive economic growth in South Africa.