By: Lonwabo Mtyeku | Photo Credit: Supplied
Seen Here: John Mlangeni – CEO for Merchant Services at FNB. Photo Credit: Supplied
First National Bank is quietly reshaping access to funding for South Africa’s informal and small business sector by using digital transaction data to unlock working capital for entrepreneurs who have traditionally struggled to access formal lending.
As many small and township businesses continue operating outside conventional banking frameworks, FNB’s Cash Advance solution is emerging as a data-driven funding model designed around how informal businesses actually trade — one card transaction at a time.
For years, access to finance has remained one of the biggest barriers facing South African SMEs, particularly businesses operating informally or without extensive financial records. Traditional lending models typically require audited financial statements, lengthy application processes and fixed repayment structures that many small businesses cannot easily accommodate.
FNB is now leveraging transaction activity generated through its SpeedPoint devices to bridge this gap.
According to John Mlangeni, CEO of FNB Merchant Services, many informal businesses are commercially active but remain excluded from formal financing systems because their trading activity is not visible within traditional financial models.
“Many informal businesses are financially active but structurally invisible,” says Mlangeni. “When a business starts accepting card payments, its trading becomes visible, and that visibility is what opens the door to funding.”
Through FNB Cash Advance, qualifying merchants can access working capital based on their card transaction history processed through SpeedPoint devices. Rather than relying on fixed monthly repayments, the funding model automatically deducts repayments as a percentage of daily card sales — creating a repayment structure aligned to real business activity and fluctuating cash flow.
The model is increasingly gaining traction among smaller enterprises.
Since launch, 65% of FNB Cash Advance payouts have been below R100,000, while nearly a third of funded businesses reported annual turnover below R1 million. The figures highlight the product’s growing relevance among informal traders, township businesses and emerging entrepreneurs seeking manageable financing solutions.
The funding solution also forms part of FNB’s broader merchant ecosystem strategy, where payment devices serve not only as transaction tools but also as gateways into the formal financial system.
By capturing real-time sales data, SpeedPoint devices allow FNB to assess cash flow behaviour, trading consistency and settlement patterns — reducing reliance on paperwork-heavy credit assessments.
Once businesses establish sufficient transaction history, funding offers can be pre-approved, significantly simplifying the lending process and removing many of the barriers that traditionally exclude smaller enterprises from accessing finance.
The importance of innovative SME funding solutions is amplified by the scale of South Africa’s informal economy, which is estimated to contribute approximately R750 billion annually to the national economy.
At the same time, payment behaviour among SMEs continues to evolve rapidly. FNB data indicates that approximately 47% of incoming SME payments are now made through card transactions, alongside cash and alternative payment methods.
Industry analysts believe this shift toward digital payments is creating new opportunities for banks and fintech companies to design funding solutions based on live trading data rather than static financial records.
For many entrepreneurs, transaction-led lending could become a critical tool in helping businesses improve liquidity, purchase stock, manage operational costs and scale sustainably.
As digital commerce becomes increasingly embedded within township and informal economies, FNB Cash Advance reflects a broader shift toward smarter, more inclusive financing models that recognise and support the realities of modern small business trading in South Africa.
The initiative also signals a growing transformation within the banking sector, where data, digital infrastructure and payment technology are beginning to redefine how financial inclusion is delivered to millions of underserved entrepreneurs.
