Starting a loan business in South Africa in can be a profitable business because people are always looking for money. This kind of business is always regulated by the government to make sure that consumers are safe.It was shown on an episode of Skeem Saam how unregistered loan businesses are treated and if they find your business unregistered how the authority will deal with it. Follow these easy steps on how to make your loan business successful. Learn how to be a professional mashonisa.
Make Research And Know Your Target Market
You’ll need to start by finding statistics regarding whether or not there are a lot of employed people who might need pay day loan advances in your city. In the South African context you’ll need to do some extensive research into consumer behaviour as well as the micro finance industry in the country. This sector has experienced extensive growth since the amendment of the National Credit Act in 2005, with more lenders entering the market to provide services to the previously un-banked and low-income sector.
Know Your Competition
There are numerous micro lending institutions that may already be providing the services that you aim to offer, so make sure that you find a way of differentiating your services.
Get Your Licence Aand Regulations At Your Local Government
In South Africa you will need to abide by the regulations set by the NCA as well as the National Credit Regulator in order to operate a cash loan business in South Africa.
You’ll need to secure a license as a payday lender
The registration fee for a new micro finance company is R2000 plus R250 branch fee per location. Application forms can be downloaded from the NCR website.
Get An Office To Look More Professional
You’ll want to ensure that you run your business from a trusted, reputable location so that consumers can value your business
Make Sure To Be Aware Of The Necessary Regulations
Parliament is increasingly concerned about the high cost of credit in the country, especially to the poor. As a result, the NCA requires lenders to subscribe to a code where the credit assessment measures are now far more prescriptive.
There are various insurance cover factors to consider. You will need to be fully versed on the ins and outs of the entire industry, to make sure that you provide quality services.