South African fintech companies Ozow and Lula have partnered to improve funding access for small and medium-sized enterprises (SMEs), as businesses continue to struggle with limited access to finance.
The new collaboration will allow Ozow merchants to apply for business funding directly through an integrated digital platform powered by Lula, with qualifying businesses able to access funding of up to R5 million.
A recent report by the Trade and Industrial Policy Strategies (TIPS) found that both private banks and public finance institutions are struggling to meet demand for SME financing.
According to the report, bank lending to SMEs remains lower than lending provided to large corporations and retail banking clients.
The study also noted that funding from the Industrial Development Corporation declined from around R3 billion in 2016 to approximately R1 billion in 2023.
The Small Enterprise Finance Agency (SEFA) has also experienced a decline in SME funding since reaching its peak in 2022.
Against this backdrop, the Ozow-Lula partnership reflects a growing trend in the fintech sector, where payment platforms are integrating financial services to support business growth and improve access to capital.
Embedded funding to simplify SME access to finance
Cape Town-based Lula provides digital banking and funding solutions tailored for SMEs, using alternative data and proprietary credit-scoring technology to assess businesses.
Ozow, which connects businesses to more than 47 million South African bank account holders through its payment platform, said the partnership strengthens its broader merchant support offering.
“Our focus has always been on empowering businesses and giving them the tools to thrive in the digital economy,” said Ozow interim CEO Rachel Cowan.
“Through this partnership with Lula, we are extending that role by improving access to funding for our merchants through a channel they already use and trust,” she said.
Through the integrated platform, Ozow merchants will be able to view potential funding amounts they may qualify for before completing an application, based on their transaction history within the Ozow ecosystem.
The partnership is expected to simplify the funding process by reducing the need for businesses to navigate multiple application systems and financial platforms.
Fintechs move toward ecosystem-based services
According to David Winter,Senior Vice President of Business Development at Lula,the partnership aligns with Lula’s strategy of expanding funding access through embedded financial services.
“Lula’s approach has always been to meet businesses where they are,” he said.
“By partnering with Ozow, we are able to extend our reach to a large and active base of SMEs that are already participating in the digital economy.”
Industry analysts say fintech partnerships are increasingly shifting towards ecosystem-based models, where businesses can access payments, banking and funding services within a single platform.
For Ozow, the partnership forms part of its wider strategy to strengthen value-added services for merchants beyond digital payments.
“This collaboration enables us to provide funding solutions in a way that is both accessible and aligned with how these businesses operate on a day-to-day basis,”Winter said.
