Yoco secures $100 million credit facility from Victory Park Capital to expand SME lending

Yoco Technologies, a Cape Town-based fintech firm, has secured a $100 million credit facility from Victory Park Capital Advisors to bolster its SME lending services. The facility will enable Yoco to offer finance and cash advances to its network of over 200,000 small-business merchants. The credit facility, arranged directly by Victory Park Capital, a specialist in asset-backed lending, is a private credit deal rather than a public bond or syndicated bank loan. The terms of the facility, including pricing and maturity, were not disclosed.

Yoco has raised over $170 million from investors including TPG, Dragoneer Investment Group, and Partech. The new facility, which is debt rather than equity, will not alter Yoco’s shareholder register. Yoco Capital, the company’s merchant finance product launched in 2018, offers eligible merchants a cash advance repaid automatically through a percentage of their card sales. The product is not a conventional loan, as it lacks an interest rate, collateral requirement, and late-penalty regime. Instead, Yoco charges a flat fee and adjusts repayments based on the merchant’s sales.

The $100 million facility is significant for Yoco, providing additional capacity to meet demand without relying solely on its own balance sheet. This move comes as South African policymakers focus on the country’s small-business credit gap, with micro, small, and medium-sized enterprises (MSMEs) generating about 34% of GDP and 60% of jobs but only 5% having access to formal credit. Victory Park Capital, founded in 2007 and headquartered in Chicago, specialises in private asset-backed credit and has been expanding its emerging-market fintech lending strategy, particularly in Mexico and Colombia. This transaction extends Victory Park’s exposure into South Africa, adding a payments-and-lending platform to its portfolio of short-duration, asset-backed credit.