To help stimulate job creation and strengthen the backbone of South Africa’s economy, IFC, a member of the World Bank Group, today announced a significant local currency loan to Lula Lend (Lula), one of the country’s leading digital lenders.
This partnership aims to boost access to finance for micro-, small-, and medium-sized enterprises (MSMEs), a sector widely recognised for its role in driving employment, innovation, and inclusive economic growth.
The new funding package consists of a 170 million rand loan (equivalent to $10 million), which will be channelled directly into unlocking much-needed working capital for thousands of South African MSMEs. Importantly, at least 80 percent of the financing will be dedicated to micro and small businesses—the segment most underserved by traditional banking systems. For many of these businesses, access to timely funding can be the difference between stagnation and growth, or in more challenging cases, survival and closure.
South Africa’s MSMEs are central to the country’s economic fabric, generating around 34 percent of national GDP and contributing roughly 60 percent of all employment. Yet despite their significance, MSMEs remain chronically underfunded. According to the MSME Finance Gap report, only around five percent of formalized small businesses in South Africa have access to credit. This gap severely restricts entrepreneurs’ ability to expand operations, hire additional staff, invest in technology, and navigate periods of economic uncertainty. It is this pressing financial gap that the IFC–Lula partnership seeks to address.
Trevor Gosling, CEO of Lula, highlighted the importance of the partnership and the company’s broader mission. “At Lula our mission is to empower every SME in South Africa to succeed, because when small businesses thrive, our entire economy and society move forward,” he said. “This partnership with IFC will enable us to extend more working capital to more SMEs, fueling their growth and long-term success. We’re excited to work alongside IFC to drive meaningful impact for SMEs.”
IFC’s Vice President for Africa, Ethiopis Tafara, echoed this sentiment, emphasising the value of digital-first financial models in expanding economic opportunities. “Our partnership with Lula leverages its innovative digital model to expand access to finance for South Africa’s small businesses—empowering entrepreneurs to create jobs and drive a more resilient, inclusive economy.”
Lula’s business model is built around accessibility, speed, and inclusion. Using proprietary credit-scoring algorithms and alternative data, the company provides unsecured, fully digital loans to businesses that are often overlooked by traditional banks—typically because they do not have formal credit histories, collateral, or lengthy financial records. Approximately 90 percent of Lula’s client base consists of first-time business borrowers, reflecting the platform’s role in opening financial doors for entrepreneurs previously excluded from the formal lending landscape.
The partnership between the two companies is not new; their relationship dates back to 2019. Over the years, this collaboration has aligned with IFC’s broader mandate to promote private sector development, job creation, and sustainable growth in emerging markets. By supporting lenders like Lula, IFC aims to advance financial inclusion, reduce poverty, and help build a more dynamic and equitable South African economy led by empowered MSMEs.
This new investment also forms part of IFC’s wider commitment to strengthening the country’s financial ecosystem. Since 2018, they have invested and mobilised about $1.4 billion (nearly 25 billion rand) to support MSMEs through South African financial institutions. Over the past five years, IFC has deployed more than $5.2 billion in South Africa alone, making it their largest country exposure in Africa and its fifth largest globally.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Operating in more than 100 countries, IFC uses its capital, expertise, and influence to create markets and expand opportunities in developing economies. In fiscal year 2025, IFC committed a record $71.7 billion to private companies and financial institutions, mobilizing private sector participation and advancing its mission to end poverty on a livable planet.
About Lula
Lula is a Cape Town–based fintech company founded in 2014 and dedicated to improving access to finance for MSMEs. Leveraging advanced credit-scoring technology and alternative data sources, Lula provides fast, unsecured working capital loans of up to ZAR 5 million (US$280,000), often disbursed within 24 hours. The company operates as a venture-backed entity with a strong focus on financial inclusion, business empowerment, and digital financial innovation across South Africa.
