When Capitec launched its Pay-As-You-Trade product in December 2025¹, more than just a new loan product, it was a move to dismantle one of the most persistent barriers in South African small business finance: the paperwork wall.

In last week’s newsletter, we dove deep into the economics, ownership, and operational nuances of the spaza shops economy. Navigate to the full letter here.

Now we explore how, if any, of the banks are integrating along this model. As big companies, they have a multitude of ways in which they can build products on top of their existing products to serve the spaza shop economy and perhaps extend to other informal trades. The first product we look at in that regard is Capitec’s Pay-As-You-Trade.

Capitec

Instead of demanding audited financials or formal documentation, Capitec grants businesses easy access to cash that is repaid using a percentage of future sales through Capitec’s card machines and Capitec QR¹. This is structurally identical to the global MCA model — a lump sum upfront, with repayment automatically skimmed from card transaction revenue, so repayments flex with trading activity. Credit is assessed on observable cash flow, in terms of what a business actually does, not what it can prove on paper. For the hundreds of thousands of entrepreneurs who operate in the grey space between formal and informal, this distinction is everything.

This product, along with their Entrepreneur Account, aims to extend momentum by giving smaller and underserved businesses simpler banking and more practical access to working capital¹.

The numbers tell the story. In FY2026 (year to 28 February 2026), Capitec’s total business banking lending book reached R30.4 billion, up 30% year-on-year¹. But the real signal is in the scored lending line — R3.1 billion, up 118%¹ — reflecting rapid uptake of exactly this kind of cash-flow-underwritten credit. Over the same period, 78,000 unique Entrepreneur Accounts were opened¹, adding to a group client base that now stands at 26 million active clients¹. Group headline earnings came in at R16.8 billion (+23%)¹, with a return on equity of 31%¹.

As Graham Lee, CEO of Capitec Business, put it: *”When a business that was previously invisible to the traditional credit system can suddenly access capital, you see what they are capable of.”*¹

FNB

Capitec is not alone in recognising the opportunity.

FNB’s “community economy book” has reached R18 billion across more than 250,000 informal entrepreneurs (FY2025)², with advances to MSMEs growing 20% and 28% in the under-R5 million turnover band².

They also have the AgencyPlus model where they deploy township merchants as banking agents². This points to a broader bet on embedded, community-anchored financial infrastructure.

FNB AgencyPlus is an extension of FNB’s banking services delivered through vetted third-party agents — typically small businesses or entrepreneurs — who operate as official FNB touchpoints². The agents offer select banking services: deposits, withdrawals, and account inquiries in a more informal setting². It is designed to empower small businesses (agents) to expand the services they can offer to their own customers².

Since its launch in September 2023, local agents have facilitated more than R27 million in transactions, with 5,000 customers served monthly and nearly 60,000 transactions facilitated through 157 active agent stores³. AgencyPlus grew from 25 to 118 agents in the year to June 2025⁴.

Overview

The SA banking sector is converging on two intersecting strategies for the township/SME market. The first is revenue-linked credit (MCA-style): Capitec built this natively into its card machine ecosystem, while ABSA and Nedbank outsource it to fintech partners — Preference Capital/Cash Flow Capital and Merchant Capital respectively⁵ ⁶. Standard Bank has a niche Shari’ah-compliant version via Merchant Capital⁷. This model is spreading fast because transaction data removes the need for formal collateral.

The second is agent banking. AgencyPlus is the most developed dedicated programme among the big banks, though TymeBank (via Pick n Pay and Boxer) is arguably the most aggressive nationally.

Conclusion

Billions going into stokvels, hundreds of thousands of spaza shops, and a growing layer of micro-entrepreneurs — these are balance sheet items.

The pattern is familiar. When one bank demonstrates proof of concept in an underserved market, as FNB has with AgencyPlus, competitors rarely sit still. Strategy teams begin stress-testing their own positioning, product councils get convened, and within 12 to 24 months, a variant surfaces under a different name. It happened with mobile banking, it happened with zero-fee accounts. However FNB has a different advantage in the community economy, as the biggest by deposits into stokvel accounts. It serves 110,000 active stokvel clubs, with total inflows from September 2020 to December 2025 reaching R20.6 billion, and savings balances of R4.2 billion as of December 2025, reflecting a 21% increase year-on-year⁸.

Another difference is the split in approach. Banks with the distribution muscle and appetite for operational complexity will build agent and lending networks themselves. Those that prefer to stay asset-light will continue routing demand through third-party arrangements — Preference Capital, Cash Flow Capital, Merchant Capital — absorbing the credit risk while the bank retains the client relationship and the brand equity. Both are rational bets, but they produce very different advantages over time.