Company Profile

Longman Finance was incorporated as an organisation under the laws of South Africa in 2017. The company’s offices are located in Durban, South Africa. The organisation is formed with the purpose of providing social and financial solutions to the poor, and the majority of South Africans who cannot access financial resources easily in the mainstream banking sector. The existent business plan provides a rational framework for the microfinance part of Longman Finance. Longman Finance is geared to a micro lending project in Durban and is scheduled to roll it out to 10,000 families in 4 major provinces of this country (serving the underserved area near these cities), in collaboration with other stakeholders.

Longman Finance uses a Marketing model, developed by the management that make it possible to reach out to 10,000 financially marginalized South Africans (both in the formal and informal Sector) with micro-loans. Achieving this goal Longman Finance will expand its business in Durban, and other cities and towns. Longman Finance management philosophy is to gain self-sufficiency both financially and operationally. There is capacity for microfinance to increase its role in partnering with government policy initiatives such as revival of key industries in South Africa like Agriculture, development of small-to-medium-enterprises (SMEs), meet the millennium development goals as well as financial inclusion initiatives by the South African Reserve Bank.

It is our view that most of microfinance institutions that were in business closed owing to funding challenges. In addition, the lack of focus by commercial banks to the SMEs has resulted in a proliferation of non-bank financial advisory firms and individuals offering credit outside the regulatory framework. If one has to analyse the South African economy, it is easy to see that a huge informal sector which requires funding to sustain small business operations account for at least 60% of economic activity. Longman Finance intends to accomplish the needs of this untapped demand for financial services as well as deliver financial instruments of innovative nature to deliver economic development.

In addition to micro-lending for micro business, Longman Finance covers the traditional need of consumption smoothing. This is crucial given the transitory nature of most civil servants and the general workers receiving a salary just above the minimum wage as well as the traditional shocks like funerals, school fees and ill-health to mention a few.

Bearing in mind upon these factors, Longman Finance will emerge as a new microfinance institution focusing on providing microfinance products that supplement economic growth and development through increasing productivity and exploiting opportunities.

Vision

To become a RESPONSIBLE and LEADING provider of microfinance products and services.

Mission

Longman Finance exists to empower people economically while ensuring that those who live in poverty, particularly vulnerable women and children, are served in body, mind, and spirit. The springboard of Longman Finance is compassionate micro-finance lending that includes a range of support services for its members through multiple local programs in strategic urban and rural areas of South Africa, and will eventually spread to other countries in Africa.

By 2030, Longman Finance expects to empower the entire population of the unbanked millions of South Africans to move out of extreme poverty through strategic goals:

  • This includes urban and rural lending,
  • Community Investment. This comprises consumer-owned businesses, social businesses, and social investment.
  • This involves small-business development, hands- on learning, technical know-how culminating in self- employment, and life skills development.
  • Dynamic social network. This involves sharing resources, local and global interdependence, and mobilization of social networks.


As a Microfinance Institution, Longman Finance intends to increase opportunities for the poor to access financial services by providing financial services to low-income entrepreneurs.

LONGMAN FINANCE’S CORE VALUES ARE:

Enhancing our clients’ self-determination, serving as an ongoing financial resource for members, and Achieving significant outreach and financial self-sufficiency.

Board Comittees

The organisation has established three board committees namely, Risk and Credit Committee, Audit Committee and Remuneration Committee. Each of these committees is comprised of at least two elected members as shown in the table below:

Risk and Credit Committee

Terms of Reference

  • The committee will convene every quarter;
  • To review loan book for compliance with internal and external policies;
  • Monitors and reviews operational internal controls;
  • Reviews the credit policies and procedures on interest rates.

Audit Committee

Terms of Reference

  • Ensures that accounts are prepared accurately and timely.
  • Review related party transactions that arise within Longman Finance
  • Ensure that there are adequate policies and procedures related to fraud and corruption.

Remuneration Committee

Terms of Reference

  • Reviews recruitment, procurement, and staff loan policies.
  • Reviews salary increments, retrenchments, and displinary/ dismissal issues.

Products and Services

Salary Backed Loans

A growing number of microfinance programmes provide consumer loans to low-income salaried workers. Often these workers use their employment status to borrow on behalf of poor relatives and to cover for family emergencies. Under these loans, monthly deductions are made from salary accounts. There is a massive market for these loans in South Africa considering that many cannot qualify for the existing banking loans in the mainstream banking sector.

SMALL INCOME EARNERS CONSUMPTION LOANS

Longman Finance intends to extend loans to customers for consumption purposes. The main target markets being civil servants and other people whose employers are willing to make stop order payments from their payrolls. The consumer loans will be offered as bridging finance for use in between paydays in order for them to smoothen consumption and meet critical expenditures. The minimum disbursement amount will be pegged at R2000 with the maximum not exceeding 50% of the borrower’s net salary also depending on affordability after borrower’s deductions.

The repayment period ranges from one month to twelve months and interest will be charged at a rate of 10% per month on a reducing balance method. Interest will be the fixed term, no additional interest will be added. We have joint partnership with banking institutions to have our client’s loans disbursement uploaded on the cash card that our client will immediately use en-cash or buy groceries at various retail outlets.

This is so different and more acceptable in the market because of the following reasons:

  • There is no need for our clients on top of heavy bank charges that they are already incurring to transfer those funds to the bank. Also considering that the amounts that we will be disbursing are very small.
  • There are very few/ if not none of the existing banking institutions giving these loans because they are always citing huge overheads to manage these small loans but if one has to analyse our economy at the moment, there are very few working individuals that are earning above R5000 per month hence the inherent need to minimize the charges.
  • As a Microfinance Institution, Longman Finance intends to increase opportunities for the poor to access financial services by providing financial services to low-income entrepreneurs.

Organisational Structure

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Longman Finance trading as Longmanfin

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