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Old Mutual acquires Preference Capital – SA

August 4, 2022 8:44 am

Old Mutual has joined a growing list of financial services groups planning to provide finance to the SMME market after it yesterday announced the R350 million acquisition of a minority stake in Preference Capital – a leading local provider of SME finance solutions.

The deal also carries the option to purchase a controlling stake, pending the Competition Commission’s approval. African Bank, Tymebank and Standard Bank have all recently announced initiatives to gain a greater share of the SMME financing market.

The R350m investment in Preference Capital would enable Old Mutual to partner with a growing base of SME customers, alternative distribution channels, and a diverse range of lending products enabled through innovation and speedy service, Old Mutual said in a statement.

Preference Capital comprises Cash Flow Capital, Alternative Finance Solutions trading as Bizcash, Preference Capital Asset Finance, and Change Financial Solutions.

Old Mutual SME director Nobesuthu Ndlovu said access to affordable and flexible funding was one of the biggest challenges business owners faced, and the investment in the lending specialist would address this directly.

“There is an estimated R300 to R500 billion funding gap for SMEs in South Africa, constraining business growth. Through the partnership with Old Mutual, Preference Capital will play a meaningful role in closing this gap,” said Ndlovu.

Ndlovu, also a seasoned entrepreneur, said this investment would position Old Mutual as a leading provider of holistic funding SME solutions in South Africa.

“Old Mutual has embraced the imperative of partnering with SMEs in line with its overarching business strategy. We have done this by developing tailored solutions underpinned by fully understanding the needs and challenges SMEs face,” she said.

Preference Capital chief executive Jonathan Goldberg said the investment would accelerate the company’s mission to build and grow the South African SME sector by providing growth finance, insurance, and foreign exchange services.

“SMEs require a unique solution that understands their constraints and funding requirements. Together with Old Mutual, we believe that we can support more organisations seeking partners who can innovatively facilitate their growth,” Goldberg said.

 

Author: Edward West ©

Old Mutual acquires Preference Capital – SA Reviewed by on . Old Mutual has joined a growing list of financial services groups planning to provide finance to the SMME market after it yesterday announced the R350 million a Old Mutual has joined a growing list of financial services groups planning to provide finance to the SMME market after it yesterday announced the R350 million a Rating: 0
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