South African fintech Yoco has secured a $100 million credit facility from US investment firm Victory Park Capital to expand its merchant cash advance business. The company said the facility will give it greater control over the pricing and risk of financing offered through its payments platform.
Yoco Capital has advanced more than R6.5 billion ($395 million) to over 40,000 merchants since 2018, working with specialist credit providers. Advances range from R2,000 ($122) to R1.5 million ($91,185) and require no collateral. Eligible merchants see offers in the Yoco app, based on live sales data from in-person and online payments, rather than submitting an application.
Repayments are deducted automatically from a merchant's daily takings instead of fixed monthly instalments, so they move with sales. That structure raises questions about how merchants cope when revenue falls or trading becomes unpredictable.
"Financing was the one layer we didn't fully control. This facility changes that," said Carsten Holtkemeyer, Yoco's chief executive officer. Yoco calls it one of Africa's largest dedicated merchant cash advance facilities. It says it has not recorded an unprofitable lending cohort since 2018, including during the Covid-19 pandemic, but did not publish default rates, write-offs or cohort-level figures.
Yoco plans to extend Yoco Capital to more of its 200,000-plus merchants across retail, hospitality and services in South Africa. The 2025 Finfind and African Bank SA MSME Access to Finance Report puts the country's small-business financing gap at about R350 billion ($21.3 billion), with SMEs receiving 13% of national bank lending against 51% for large corporations.
Victory Park Capital says it has invested more than $12 billion across 260 investments since 2007. Senior partner Jason Brown said the firm supports Yoco's aim of widening access to flexible financing for South African entrepreneurs.
