Access to formal finance and working capital remains a significant challenge for many South African small business owners, especially informal businesses and microbusinesses, who remain largely excluded from the formal credit offering. Indeed, unlike other parts of the continent, there is no significant presence of developmental microcredit operators in South Africa, despite demand for affordable, and accessible credit solutions for productive use.

Agora Microfinance Southern Africa (a subsidiary of Netherlands-based Agora), started operations in April 2025 in Cape Town with the aim of changing the microlending landscape in the country, starting in the Western Cape Province.

It is currently rolling out a development strategy initially targeting informal businesses and small business owners. In this start-up phase, it will look at providing “boost loans” of up to 7,000 rands (ca. 400 U$) and larger “growth loans” of up to 50,000 rands (ca. 2,900 U$).

AMSA will need to overcome a number of challenges to reach its goals, including the difficulty to scale, safety and crime in many excluded communities and informal entrepreneurial ecosystems, building brand trust and recognition. It is also dealing with operational constraints, such as a small team size with limited geographical reach and long distances that need to be covered in the greater Cape Town area and surrounds.

Part of the solution will be digital expansion and partnerships to boost and sustain its growth strategy: Developing online presence and visibility, and working with existing networks and organisations. It aims to reach a client base of 3,400 clients and a loan book of R 1.5 million by the end of 2025, achieving financial sustainability at small scale while maintaining social impact.