South African fintech startup BlackPay describes itself as a “no-frills, non-banking” multi-product platform established to champion financial inclusion for economically active yet marginalised communities.

Formed in 2017, BlackPay operates a multi-product and multi-party platform and offering simplification of origination services in lending products and financial services. The startup has developed features that address the specific needs of its market, powered by its developed alternative credit scoring technology.

In the beginning, the company worked with labour unions to address financial inclusion challenges within the South African labour force. But then it started getting into property financing in townships and rural areas, prompting a pivot.

“Our lending products talk to different market needs, with backyard finance, taxi finance, home loans and vehicle finance. The traditional home loans and vehicle finance competition varies from established banks to niche players, while backyard finance has less competition, especially as big institutions view township and rural markets as high-risk,” said Nkonzo Mbetha, managing partner at BlackPay.

“When it comes to our Lobola, Mshado, Mcimbi, and Monate loans, there are no known players in the formal lending space except for unregulated loan providers, making BlackPay a pioneer in the space. Our in-depth research informs us that there’s a great need for financial products structured to address the needs of the majority of the South African population, with various cultural practices established within black communities.”

These loan offerings are backed by various funds, banking partners, and local financial services institutions, with BlackPay taking lending to communities that previously had little access to it.

“The uptake on backyard financing has been impressive and driven by a growing need for affordable accommodation in areas close to places of work at the bottom of the pyramid,” said Mbetha. “We see this growth accelerating as the government is battling to keep up with housing provision for the ever-growing market of people moving to big cities for better opportunities.”

The startup is exploring a pan-African strategy with financial institutions operating in markets with similar profiles to South Africa, mostly in the SADC and East Africa.