Old Mutual announced that it plans to acquire a minority stake in Preference Capital, a local SME finance solutions provider, for R350 million. The acquisition will allow Old Mutual access to a growing base of SME customers, alternative distribution channels and a range of lending products. Old Mutual said there is an estimated R300 to R500 billion funding gap for SMEs in South Africa, constraining business growth. It hopes to fill this through access to affordable and flexible lending, which is a challenge faced by SMEs. The acquisition aims to build and grow the SME sector by providing growth finance, insurance and foreign exchange services.
