Hire purchase and microenterprise finance in Durban, South Africa
Apart from finance from savings and from family, hire purchase was the most commonly used source of business finance for microenterprises, according to a survey in South Africa. The advantages to the microenterprise are the speed and low administrative costs of processing the loan using trade references to establish credit-worthiness. Hire purchase is also valuable to retailers and manufacturers to boost sales. This article suggests that, as computerization increases in developing countries, speedy credit searches, as used successfully for hire purchase agreements in South Africa, could become much more widespread in the processing of micro-credit.