According to a World Bank Report, South Africans were the biggest borrowers in the world in 2014. With a highly developed financial system, the South African market is slowly becoming accustomed to fast and efficient financial services.

While a large portion of the population still remains unbanked, more people are making full use of financial services available.

Reports in 2015 indicated that as much as 76% of the average South African household’s income goes towards paying off debts, which shows that there is a growing demand for loans.

Keeping with world trends, financial institutions on the African continent provide an array of loan services.

Types of African Loans available:

In a typical African country’s financial system, various loans are offered, such as instalment loans, overdrafts, secured loans, unsecured loans, fixed rate loans, adjustable rate loans and home loans.

Instalment loans are repayable in set amounts over a particular period of time, with added interest.

Overdrafts are types of revolving credit and are extended to individuals or businesses who can afford to make repayments comfortably.

Secured loans require applicants to put some form of collateral up, while unsecured loans are considered riskier for lenders. As a result, interest rates are often higher for these loans.

Fixed rate loans have interest rates and monthly payments that stay the same for the duration of the loan, while adjustable rate loans have varying interest rates.

Home loans, while not so easy to qualify for, are becoming increasingly some of the most popular African loans.

Depending on how well-developed the African’s country’s financial system is- these loans may be available through bank branches or through micro lending institutions.

Most lenders offer their services online too.

Market disruptors:

There is no doubt that the African market is wide and varied, making it one of the most complex markets to tap into and operate in- and that’s for any industry.

According to Bloomberg:

“JUMO is part of a growing trend of financial technology start-ups in emerging markets such as Africa, India and China that are taking business away from traditional banks in the areas of credit, savings and insurance.”

The company is the micro-financing unit of Cape Town-based AFB (Pty) Ltd, which builds a picture of its customers from thousands of data points in calling records, ranging from who they’ve phoned to airtime and data purchases and other mobile transactions.

Credit decisions are based entirely on mobile network data.

As the African market continues to use more mobile technology for transacting, this platform is surely set to disrupt the way that traditional financial institutions offer African loans.