Wiehahn Koch | Head | Purpose Lending | Capitec | mail me |
For many people, the word credit evokes negative feelings because they associate it with debt risk. However, when we analyse its macroeconomic role, we must draw a clear distinction. We must distinguish between lending for general consumption and lending for a specific, productive purpose.
The first approach remains broad and unfocused. As a result, it often produces the burdensome outcomes that fuel fear. The second approach offers a more responsible alternative.
From debt burden to economic opportunity
In our view, it represents the most constructive way to align finance with the real economy. When a loan ties directly to a defined goal such as education, a vehicle or business cash flow, it initiates a productive dialogue about a purpose-led model. That shift defines the future of finance.
This shift matters deeply in South Africa’s current environment. Ours is a nation with a profound capacity to adapt. We see it in the grandmother who uses her banking app to manage her social grant. We see it in parents who lay foundations for their children’s ambitions. In addition, we also see it in millions of digitally savvy young South Africans who launch side hustles through their phones in a constrained job market. These realities demand innovation aligned with the future of finance.
For too long, the formal financial system has struggled to keep pace with this dynamic economy. The traditional model was built around a single, formal payslip. It was not designed to serve informal earners, gig workers or multi-income households. Therefore, the purpose-led model becomes more than theory. It becomes a practical necessity and a cornerstone of the future of finance.
Let us be clear. Credit is not harmless. When people use it poorly, it places families under pressure. When they use it responsibly, it opens doors. A clear, fair loan tied to a tangible life goal becomes a tool rather than a threat. At its best, credit enables forward movement. It does not push households onto the back foot.
The payslip problem
A major barrier to well-structured credit lies in outdated assessment systems. Traditional models often fail to capture the full scope of a person’s financial life. The gig economy and side hustles create what we call the payslip problem.
For example, a lender may decline an application because its system cannot process income from e-hailing services, online stores or backroom rentals. Yet entrepreneurial leadership drives economic transformation. Ironically, legacy systems exclude precisely these individuals.
Innovation must address this gap directly. Modern loan agreements should assess total earnings and cash flow, not just a payslip. Such an approach can unlock fair access to credit for millions of people who earn irregular income. Repay-as-you-earn models also offer flexibility. They allow clients to make smaller payments throughout the month. This structure suits entrepreneurs and gig workers better than large, fixed monthly instalments.
Our interim results show that data-driven loans to clients with multiple income sources grew by 81% in the six months ending August 2025. This data signals growing momentum toward the future of finance.
Lending for life’s milestones
A purpose-led approach aligns the bank’s incentives with the client’s plans. The question shifts. Instead of asking how much a client can borrow, lenders ask what the client aims to achieve and what resources will make that goal feasible.
We see this approach across three key areas:
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Education
Education remains one of the most reliable pathways to higher earning potential. For many families, cost and administrative complexity create barriers. A straightforward, affordable student loan provides breathing room. It allows individuals to pursue further study without destabilising the household.
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Mobility
In much of South Africa, mobility directly influences income potential. A vehicle can unlock employment or enable access to better opportunities. For e-hailing and delivery workers, it constitutes the business itself. Responsible lending requires a holistic view. Lenders must assess not only instalments but also fuel, tyres, maintenance, insurance, licence renewals and unexpected repairs. Sustainable vehicle ownership depends on realistic, long-term budgeting.
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Home ownership
A home typically represents the most stable long-term asset a household can build. Beyond initial purchase, purpose-driven finance helps preserve and enhance asset value. It allows homeowners to access capital for incremental improvements over time.
In the first half of our 2025 financial year, we reported that purpose lending in education, mobility and home-improvement finance rose 188% to R1.84 billion. This increase demonstrates that clients prefer credit tied to durable goals rather than unfocused borrowing. Such trends reinforce the evolution toward the future of finance.
Fuelling the economic engine
The same principles apply to small and medium enterprises (SMEs), which power the broader economy. As the Banking Association South Africa (BASA) notes, “the business of banking is inherently developmental”.
For many entrepreneurs, cash flow remains the primary growth constraint. A capable financial partner understands this constraint. For instance, it can provide an affordable card machine that settles funds the next day rather than in a week. Speed to cash enables businesses to purchase stock and pay suppliers on time.
Effective financial partners also invest time in understanding the business beyond its balance sheet. They recognise seasonality. They understand the winter lull of a coastal restaurant and the summer scale-up of a clothing designer. This partnership model transforms an entrepreneur’s outlook. It provides confidence to invest in inventory before peak seasons. It replaces rigid algorithms with contextual understanding. Sustainable growth requires both capital and insight.
South Africa stands defined by opportunity. The finance industry must participate actively in unlocking that potential. It must remove structural barriers. It must design tools that reflect lived economic realities. By aligning lending with purpose and productivity, the sector can shape the future of finance and support those who are building the country’s future.
