Maia Capital, a boutique impact investment firm, announced that it has invested R100 million to improve access to financial products for the low-to-middle income households of South Africa to alleviate the rising cost of living.
The R100 million mezzanine debt facility is invested through Maia Debt Impact Fund I, Maia’s maiden impact fund, which reached its first close in December 2021.
The Fund aims to make investments that make a positive impact on society, the economy, and the environment while generating positive financial returns. Maia Capital invests in the areas of education, housing, healthcare, financial inclusion, clean technology, and gender inclusion.
FinCredit is a financial inclusion platform established on the back of a 5-year track record in successfully originating and building quality credit books that offer loan consolidation and housing finance mainly in Gauteng with plans to grow to other parts of South Africa.
Through partnership with employer groups, FinCredit can offer credit that is well risk-mitigated, while enabling access to quality and affordable finance products for clients that have no alternative finance solutions at their disposal. Fincredit’s products are designed with an objective to support the clients’ financial education and financial wellness.
South African households are heavily indebted, spending near 70% of their income to service debt, and are increasingly accessing short term debt to finance their day-to-day expenses. FinCredit helps its clients with debt consolidation at favourable financing costs thus immediately reducing the cost of finance on the current debt. Over a medium period, this offering aims to reduce the overall level of a household’s indebtedness.
The Maia Capital and FinCredit partnership will enable increased access to financial products by the low-to-middle income households and reduce the cost of finance.
Veenal Singh, Co-founder and CEO of Fincredit said, “We’re excited about the partnership with Maia Capital. The ability to fund growth and demand in the market is critical and will enable us to demonstrate the positive impact of the products that Fincredit offers.”
Dinao Lerutla, Managing Partner of Maia Capital said, “The transaction aligns well with our impact objective of inclusive growth, and our financial inclusion theme, in how it enables the low- to middle-income households to have access to more affordable financial products.”
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