Making money work for women
She is the owner of Mazwe Financial Services, a five-year-old microlender with a national footprint that is steadily growing its business by helping to develop the "second economy". "It is a very tough industry and getting into it is very difficult," says Bebula.
"However, we have managed to make a difference by identifying our market and establishing good relations with our clients, to the point that we get a lot of repeat business." The difference she refers to is in providing finance, generally unsecured and of a long-term nature, that is to be used as development financing. It can be used for anything from establishing a small business to helping a family to buy their own home. "There is a huge demand for unsecured loans, which you can see by even the big banks getting into the space," she says.
The market remains tight, however, and with the added restrictions imposed by the National Credit Act, there is a fine balance between helping out customers and ensuring they are not overly indebted. She applauds the introduction of the Act for the social impact it intends to have, particularly on financially vulnerable individuals. "It has helped to regulate the industry because it looks after the best interests of the customer, but it does make competition stiffer and squeezes margins," she says.
The focus on longer-term loans with a strong developmental slantmay be what differentiates Mazwe Financial Services, but also places it under the added burden of having to wait longer to recoup the investment. This makes it essential to continually top up the business's funds. Mazwe's developmental angle and the obvious market for such financing are what persuaded the IDC to provide a loan to Mazwe Financial Services in 2008. Bebula's track record of having received funding from the government's South African Micro-Finance Apex Fund when she started the business in 2007 contributed to the strength of her case. "We used that initial funding to grow the business from a book of R700 000 to a book of R2-million," she says.
Apart from the financial growth, the company has expanded to a staff of 30 people with offices spread across Gauteng, the Western and Eastern Cape, Free State and KwaZulu-Natal. It was when she was looking for another injection of funding to take the business to the next level that Bebula approached the IDC. She received a total injection of R25-million, R10-million of which was from the Women's Entrepreneurial Fund. This funding was used purely as capital to lend on to her clients, which Bebula says has been good to grow the business. She says that although microlenders don't have to comply with stiff regulations such as capital adequacy levels, it is still a major challenge to operate in this segment of the market.
"Government support through organisations such as the IDC is crucial." The benefits of providing development funding are all obvious to the IDC, whose mandate is firmly
centred around helping those who help to grow the economy. Mazwe, having helped to create growth for more than 1 200 people through the small businesses it counts as customers, therefore falls firmly into the category of businesses the IDC will support. Bebula says her next goal is to grow Mazwe Financial Service's national reach to continue her focus on developmental loads that have a strong social impact.