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Makanda Finance Proves That You Can Start A Business With No Capital

Mohamed Rasivhetshela launched an innovative micro-finance business with no capital of his own – just a smart business idea and the patience to grow strong foundations.

Nadine Todd




Vital Stats

  • Players: Simanga Dlamini (MD), Khomotso Disolwane (marketing director), Mohamed Makanda Rasivhetshela (CEO and founder),
  • Company: Makanda Finance Solutions
  • What they do: Micro-finance
  • Launched: 2010
  • Visit:

One of the biggest myths surrounding start-ups is that you need a lot of funding and a refined idea to get a business off the ground. Mohamed Rasivhetshela, founder of Makanda Finance, is proof that even a sophisticated online micro-lender can be launched with R1 500, a notebook and a bicycle.

Rasivhetshela had been an entrepreneur since school, selling sweets and CDs to his classmates. He’d even grown his little side business, recruiting agents to sell on his behalf and giving them a cut at the end of each day.

By the time he started varsity, he was known as the mover and shaker of his family, and his brother had an idea for him. Township loan sharks (‘mashonisas’) typically charge 50% interest on short-term loans. There was a business opportunity for Rasivhetshela to offer a better service at lower rates.

Related: Business Partners Limited Explain What It Takes To Have The X (Fundable) Factor

Rasivhetshela jumped at the idea. There was just one problem: He had no capital. But he did have a friend who was willing to lend him the money as a business investment.

“I started small. I went to friends and neighbours and offered them small, short-term loans that they had to pay back to me with interest at the end of the month,” Rasivhetshela recalls, adding that he was so excited about the business idea he didn’t pay any attention to the potential risks.

“I was working within my network and I just trusted that everyone would pay me back,” he says. And they did. 95% of those first loans were repaid on time with interest, with only 5% defaulting, and collected shortly thereafter. “There was a business here. I just needed to make it work,” he says.

Starting Small

From the start Makanda Finance had a dual business model: Investors could invest as little as R50 into the business and receive interest at the end of each month, and borrowers could loan up to R300 at a 30% interest rate, due at the end of each month.

Rasivhetshela kept a careful notebook and fetched and delivered cash on his bicycle. “At the beginning it was all word-of-mouth,” he explains. “I was educating investors and making it as simple as possible for them to try the model out, which is why I started at R50. They could then invest more as they saw how the business worked and received their returns.”

It didn’t take long for the young entrepreneur to realise that there was a real opportunity here, and he needed to start formalising the business. “I had no interest in becoming a mashonisa,” he says.

“I had a friend who was a lawyer, and he helped me to set up formal processes and register as a credit provider with the National Credit Regulator. We’re also a member of MFSA — Micro Finance South Africa — and we’re regulated by the National Credit Act.” As a result, Makanda Finance’s interest rates are also much lower than when Rasivhetshela started out in 2010.

Starting small meant that he could build a sustainable business with strong foundations.

“For the first year and a half I operated out of a flat. Simanga Dlamini and Khomotso Disolwane joined me part time. I had already dropped out of varsity to concentrate on the business full time, but it couldn’t sustain all three of us yet.”

Related: Giraffe Sticks Its Neck Out For Job Seekers

By 2012 Dlamini and Disolwane joined the business full time as partners, and by then Makanda Finance was operating an online platform, was registered with the NCR, and had a steady stream of investors and borrowers.

“The back-end was complicated, but the market offering was simple: Invest in us or borrow from us,” says Rasivhetshela. “We needed to start small so that our market could try us out, particularly the investors. We had to prove that we were here to stay, and that our returns could be trusted.”

To entice investors, Makanda Finance still offers investments from as little as R99 per month today, with the ability for investors to top up their accounts at any time. 14% monthly compound interest is offered, compared to 7% by banks.

A Simple Value Proposition


Ensuring they get paid is a critical element of the business. “That very first month was all trust and naivety,” says Rasivhetshela.

“As the business grew and clients became borrowers and investors who we didn’t know, systems and processes became increasingly important. We used our profits to fund a strong platform that’s capable of fast and accurate credit checks. Over the past seven years we’ve become very good at determining low risk from high risk clients.

“Ultimately, our investors are our most important assets, so ensuring they are paid on time is our top priority. We can’t afford to take risks that might jeopardise that.”

Makanda Finance currently has 4 500 clients, of which 300 are investors. “Khomotso’s key role is educating our market,” Rasivhetshela says. “Our growth is determined by our investors, and so finding and retaining investors is key to our future success. Our turnover is currently R1,2 million per month, and this will grow as more investors join the platform.”

There is no doubt that there is a huge market for micro-finance in South Africa, and Makanda Finance has found an innovative way to not only offer that finance, but provide a flexible investment platform for people who are often new to the investment market.

It’s taken a lot of focus, investment into creating a fully-automated online platform, and patience, but Rasivhetshela, Dlamini and Disolwane have created the foundation for an incredibly strong business going forward. 

Do this

Consider two markets that could benefit each other (ie, investors who have cash, and people who require micro loans), and how you can become the conduit between them. Some of the most innovative businesses have been built on this model, including Airbnb and Uber.

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.


Watch List: 11 Teen Entrepreneurs Who Have Launched Successful Businesses

These teens are proving that you don’t need a driver’s licence – or the ability to vote – to create and execute a successful start-up.

Diana Albertyn



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In South Africa youth entrepreneurship is encouraged as the best way to build the economy. Teens are no longer relying on tertiary education to jumpstart their careers, as many high school students become budding entrepreneurs. From make-up to confectionary and tech-centred ventures, youth entrepreneurship is taking the business world by storm.

“It’s easier than ever to become an entrepreneur, and technology has a lot to do with it. You’re a tech-savvy millennial, and Internet and mobile technologies make it easier to connect and identify with people, based on shared values and ideals,” says Michael Freestone, founder of the MJF Group. “All entrepreneurs wonder if their companies will succeed, but you don’t really know until you try. So, do it while you’re young and have little or nothing to lose.”

And that’s exactly what teenagers across the country are doing. While being a teenager is stressful enough, without worrying about marketing and your bottom line – these young entrepreneurs thrive on success, which must be their secret sauce to their winning business ideas.

  1. Rabia Ghoor
  2. Cory Nieves
  3. Nathan Woodrow
  4. Isabella Rose Taylor
  5. Mikaila Ulmer
  6. Moziah Bridges
  7. Tony McPherson
  8. Anthony Veck and Malvin Musanhi
  9. Reabetswe Nkonyane, Phumla Mvila, and Thandokazi Mtshakazana
  10. Omphile Sekwele and Didintle Nkambule
  11. Fisokuhle Lushaba and Wendy Nkosi
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10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

The future of entrepreneurship has never looked so bright…these young entrepreneurs share their wisdom around building a successful business.

Nicole Crampton



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Natural Talent Can Become Your Success


Thabo Khumalo

Thabo Khumalo – ToVch

“I learnt to design and sew while assisting my mother who was a seamstress, and that is when I realised that I had a talent to create,” Thabo Khumalo explains. “But I never knew I was an entrepreneur.” Thabo Khumalo started his company ToVch in 2010 and has since appeared in South African Fashion Week, Soweto Fashion Week and Mpumalanga Fashion Week.

Khumalo has a small but engaged audience, who he communicates directly with. “The brand has a dedicated audience, and the social media presence also allows me to continuously scan the fashion environment to keep up with external forces.”

The Lesson

One of the most challenging aspects of launching his businesses was marketing the brand with limited funds. He used social media and word-of-mouth to market. “On social media, people share your brand with others simply because they want to,” says Khumalo. “It’s a powerful platform, and it does not cost anything.” Khumalo built up his company using support from a strong online network, which became his marketing strategy.

Read more on How Fashion Start-Up ToVch Built A Brand Presence With Only A Little Budget.

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For Founder Of National Tekkie Tax Day Having A Higher (Business) Purpose Keeps Her Driving Forward

The NGO space isn’t easy. It’s a constant uphill battle to connect scarce resources with the vulnerable. Annelise de Jager has persevered in this space because she’s tapped into her personal purpose and values.

Nadine Todd




Vital Stats

  • Player: Annelise de Jager
  • Initiative: National Tekkie Tax Day
  • Launched: 2013
  • Visit:

Use your purpose to drive you forward

Connect your purpose with what you do, and you’ll find untapped reserves of perseverance and the discipline needed to achieve your goals.

Purpose before profit is not a new concept in business. In fact, it underlines the motivations behind some of the most successful entrepreneurs. It’s also not reserved for social enterprises alone.

However, it is in the social entrepreneurship and charitable spaces that living one’s purpose first found a foothold, mostly because without a strong purpose, the work would just be too hard, and many would give up.

Annelise de Jager, founder of National Tekkie Tax Day, unpacks how she’s used living her purpose to drive her forward, even when she’s faced almost insurmountable challenges and disappointments.

Make ‘living a life that matters’ intrinsic to everything you do.

“I was lucky in that I didn’t ever need to sit down and say, ‘I want my life to matter, so I need to do x, y, z’,” says Annelise. “It was intrinsic for me. However, in the past five years I’ve become acutely aware of it, and I’ve seen how important the ability to look beyond oneself is when you’re facing disappointment and challenges.

“It helps you look beyond the now, find a solution and keep pushing on, because there is a bigger goal at stake. The biggest revelation for me has been that anyone can figure this out and use it as a tool to achieve their dreams and purpose — you just need to trigger your intrinsic motivators.

Related: ReWare Did One Crucial Thing That Most Entrepreneurs Are Too Afraid To Do

“Figure out what’s really important to you, and then align this with what you’re doing, in both your business and personal journeys. Robin Bank’s Mind Power and Shaping your Destiny courses are a great place to start.”

Don’t be afraid to ask what’s next

Critical to Annelise’s journey has been the realisation that when goals are met, we need to ask ourselves: What’s next? “Too many people achieve their goals and then feel adrift. You should meet your goals. Your ultimate vision should change. That’s growth, and it’s critical if you want to keep moving forward.

“Our experiences inform our knowledge base and world views, and so as you live and run your business, that view should be changing, bringing with it new challenges and perceptions. Don’t be scared of it; embrace it.”

Annelise went to Potchefstroom University to study social work where she joined the university’s musical revue group, the Alabama Student Company. “Alabama was given the opportunity to tour Taiwan, but I was about to graduate. Travel is high on my personal values list, so I started a second degree in communications to stay in university — and — in Alabama.”

New experiences can be the source of great ideas and strength

Studying communications opened Annelise to a new discipline that she loved. “Marketing and communications are so filled with energy — an energy social work didn’t possess. I loved both, and I wanted to find a way to meld them together. This would ultimately shape my business, The Marketing Team, after I’d been a social worker for a few years. Don’t be afraid to adjust your plans based on new experiences; they can be the source of our greatest ideas and strengths.”

Related: Reel Gardening Warns That Innovation Is Never Easy

No experience is ever wasted

“We spend too much time trying to plan exactly what we should be doing, where and when, instead of following our hearts and instincts,” says Annelise. “No experience is ever wasted. Once I discovered my love for communications, I questioned whether I’d wasted four years studying social work. I hadn’t.

“Both disciplines became the bedrock of how I would assist the charitable space in South Africa. Experiences open our eyes, our hearts, and our understanding. They give us empathy and patience. They allow us to view things from other perspectives. If you want to really make a difference in other peoples’ lives, these traits are invaluable.”

Be open to finding answers in unexpected places

“By 2004 I felt rudderless,” says Annelise. “I’d been running my own business, handling communications and marketing for NGOs, developing campaigns and even assisting NGOs to run more as businesses than under-funded organisations, but it didn’t feel like I was doing enough.

“Part of the problem was that you can only give people the tools to work with, you can’t make them use them. Another problem was under-funding. Corporates spend billions each year on CSI projects but they don’t like to fund salaries and basic operational expenses.

“It’s frustrating because volunteers can’t do what needs to be done — most households need two breadwinners, which limits the availability of volunteers to assist.

“I was looking for a way to add more value. Should I start my own NGO? Where could I make the biggest impact? I’d been offered an excellent coaching position, which would allow me to walk away from the problems this sector deals with daily. It was tempting, but it wasn’t what I wanted.

“At that time I attended the Global Day of Prayer in Argentina on behalf of a client. It was at that conference that I had an almost supernatural experience. I left knowing exactly what my purpose was.

“How these realisations come to you is less important than the fact that you’re open to them. Deep down I knew what I wanted and needed — I just needed the courage and fortitude to follow my path. My experience in Argentina gave that to me because I allowed it to.”

Always find the strength to persevere.

Nothing worth doing is ever easy. In the NGO space, this is particularly true. “I developed the idea for National Tekkie Tax Day because NGOs constantly asked me to help them develop funding campaigns. I developed this fundraising model when I launched Casual Day and ran the project successfully for 18 years.

“But I also believe the NGO space can benefit from a more unified mindset to overcome donor confusion and fatigue. This is my new focus, but it’s difficult to get organisations to shift their mindsets. National Tekkie Tax Day is a step in this direction.

“It encompasses 12 national NGOs and 1 000 regional organisations across five categories — but there’s one product and one national marketing drive. Donors can choose a category to support.

Related: How Fintech Zoona Is Solving Customers’ Real Problems

“I’ve needed to persevere to help NGOs see the benefits in working collaboratively, and corporates to see the benefits of supporting the operational costs of NGOs.

“I don’t have a high profile job at a top company. People don’t call you back in my world. And yet you need to keep pushing forward against incredible headwinds.

“I wake up each morning and repeat the mantra that my success helps everybody; my failure helps nobody. There won’t always be easy wins, but with the right purpose you can persevere. You can make a difference.”

Support National Tekkie Tax Day on 26 May 2017

12 national charities | 1 000 local charities | 5 sectors to support

Animals, Bring Hope, Children, Disability, Education

Available at Toys R Us, Clicks and Babies R Us or online at

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