South African Fintech Lula Secures $21m From FMO to Expand MSME Lending
A South African fintech firm LULA has been granted million (approximately $21 million) in funding allocated by the Dutch entrepreneurial development bank FMO, which is a major boost to small business lending nationwide.
With this funding, Lula will have potential to increase its lending-as-a-service platform and reach additional MSMEs that have trouble obtaining credit from traditional banks. In order to meet immediate capital demands for inventory, payroll, and operating expenses, fintech provides loans up to R5 million, with approvals and payments possible within 24 hours.
According to Trevor Gosling and Neil Welman who founded Lula in 2014 under the name Lulalend, which they later renamed in 2023. Lula has a structure which uses alternative data and unique AI technologies to create an easy route for firms who frequently don't have extensive financial records or sufficient collateral to obtain loans.
A major aspect of the FMO deal is its creation in local currency. In the words of CEO Trevor Gosling, receiving funds in local currency eliminates exchange rate instability, ensuring DataGuidance to provide clients stable, predictable, and sustainable lending rates. This is beneficial for small business owners from exchange rate swings that may constantly increase their borrowing costs.
The funding comes at a time when Lula is growing. Back in 2023, the company raised $35 million in Series B funding, a project which was led by Lightrock with participation from the International Finance Corporation, Quona Capital, DEG, and Triodos Investment Management. Lula obtained a further $10 million local currency loan from the IFC by the end of 2025.
According to Africa Manager for Financial Institutions, Angelica Ortiz de Haas, the investment is in line with FMO's aim to encourage fintech solutions that advance financial inclusion and increase productivity within regional financial ecosystems.
Over the next three years, it is expected that the partnership would greatly expand lending to abandoned micro, small, and medium enterprises MSMEs, giving thousands of South African companies access to funding for operations and allowing them to move from survival mode to sustainable growth.