The study explored the construct of financial inclusion and sought to understand what measures are being taken by south african financial services institutions to optimise financial inclusion. In particular, the south african case study provides a snapshot of current progress in achieving financial inclusion, existing challenges in deepening financial inclusion and developments towards further reforms to achieve enhanced. In our first financialinclusion publication, we presented a new framework for assessing financial inclusion and gave an overview of the situation in south africa. Then we add to the model an indicator of financial inclusion to assess whether mobile phone penetration influences growth by improving financial inclusion.
Unlike many global publications, for nearly a decade we have been committed to showing a complete picture of africa not just a single story. This topic is particularly important for south africa, where the expansion of access to financial services for both individuals and small enterprises could help reduce poverty and inequality and stimulate job creation. On the usage side, overindebtedness is a salient concern for the financial inclusion community in south africa. It highlights differences among the 4 countries and their financial regulatory environment. South africa is an ideal case study for examining financial inclusion in driving access to the financial sector. It is the protection of a fundamental human right, the right to dignity and a decent life. Account penetration in african fragile states % 97. Womens economic empowerment through financial inclusion. Although 80% of south africans have a bank account,2 most consumer transactions are still cashbased. Second, it uses the global financial inclusion indicators global findex database to characterize adults in africa that use formal and informal financial services and identify the barriers to formal account ownership. Accelerating financial inclusion in southeast asia with. Maria soledad martinez peria is a research manager in the.
Financial inclusion in asia asian development bank. In our first financial inclusion publication, we presented a new framework for assessing financial inclusion and gave an overview of the situation in south africa. Financial inclusion in africa african development bank. The determinants of financial inclusion in africa sciencedirect. The global findex database is the worlds most comprehensive set of data on how people make payments, save money, borrow and manage risk. Apr 11, 2017 in our first financial inclusion publication, we presented a new framework for assessing financial inclusion and gave an overview of the situation in south africa. It further examines different regulations that have influenced the development of financial inclusion through the use of the mobile financial services in the 4 countries. Apr 16, 2017 south africa has a high level of exclusion and only a quarter of lowincome households use their bank accounts for transactions. South africa sa aims to increase financial inclusion in the country to 90% by 2030 banking association of south africa, 2015. South africa serves as a good environment to understand how labour unions can facilitate financial inclusion given the labour union movements influence in the countrys socioeconomic and political spheres and regulation that does not prohibit labour unions in facilitating access to. Financial inclusion is one of the main priorities of the sarbs vision 2025, particularly in terms of digital inclusion.
South africa and kenya 60 6 1 executive summary 2 contents. South africa, as africa s only g20 member and as one of the brics, plays an influential global role, and progress in financial inclusion could thus have an important demonstration effect. South africa, as africas only g20 member and as one of the brics, plays an influential global role, and progress in financial inclusion could thus have an important demonstration effect. Against the background of the current state of financial inclusion in south africa, finscope is introducing a new and extensive measurement tool indicator which aims at understanding financial productsservices usage and optimisation. A financial sector that serves all south africans a transformative financial sector south africas legacy of discrimination continues to exclude millions of people from meaningful participation in the economy, reinforcing unemployment, poverty and inequality. Designations employed in this publication do not imply the expression of any opinion, on. First, it provides a brief overview of the african financial sector landscape. South african policymakers, financial service providers and academics have embraced this. In this publication, in which we unearth the root causes of exclusion in south africa and recommend paths toward inclusion, we show how south africa can become more financially. To promote financial inclusion without risking the safety and soundness of the banking system to develop an integrated electronic payment infrastructure that will enhance interoperability of. In this paper, we investigate this question for a large sample of individuals from 37 african countries.
South africa has a high level of exclusion and only a quarter of lowincome households use their bank accounts for transactions. Financial inclusion stakeholders in south africa must balance the complementary. Stateofthesector report 5 concomitantly there is growing recognition that some sgs want to access products and services offered by the formal financial sector and that the demand for this will only grow as members incomegenerating capacity and the savings group movement grows. Financial inclusion, the development of novel methods to enable individuals at the base of the pyramid to access formal financial services and become part of the formal financial system, is considered a key prerequisite for lifting these populations out of poverty and for driving economic growth.
A transaction account is an essential financial service that can serve as a gateway to other financial services such as savings, credit and insurance. Focus on financial inclusion saeu provides an assessment of the countrys economic prospects and outlook, and an analysis of the challenges and opportunities of including millions of poor south africans into the formal economy. Gemechu ayana aga is a private sector development analyst in the enterprise analysis unit of the world bank. Bcg recently carried out research into the state of financial inclusion in the country, which revealed some of the key reasons why south africans are not. International remittances and financial inclusion in sub. The discussions surface three areas emerged as key focus areas for our work going forward. Financial inclusion is a particular concern in africa. However, the path to greater womens financial inclusion is dependent. Innovation, challenges, and the road ahead, paper presented at aerc 25 years and beyond workshop, nairobi dec 20. Financial inclusion is promoted as a development program to solve the lack of access to formal financial services for billions of people around the world. Sector distribution of bank credit in africa 2009 86 figure vi. The first unions were reserved for white south africans and defended employment policies based on racial discrimination.
Providing lowincome women worldwide with effective and affordable financial tools to save and borrow money, make and receive payments, and manage risk is critical to both womens empowerment and poverty reduction. One of the activities under the financial inclusion pillar aims to assess how effective financial inclusion in south africa can be achieved from a payments perspective. Mobile drives financial inclusion in africa, growing 20%. Recent trends and digital financial inclusion about the report at its third edition, this report provides an analysis of recent development in the ssa banking sector. This paper summarizes financial inclusion across africa. Purchase extending financial inclusion in africa 1st edition. This report also includes our viewpoint on one of the biggest challenges facing africas payment sector. Once they drop upper middleincome countries, they observe that 21 percent of firms affirm they have a line of credit and 16. The data revealed that south africa, with its sophisticated financial sector, was early to adopt policies and initiatives to advance financial inclusion and the country has experienced a noticeable increase in financial inclusion from 61% in 2004 to 89% in 2016. Join us for a oneweek executive education program that connects financial. Join social enterprise leaders for a twoday board effectiveness and inclusive finance workshop in nairobi, kenya. Gemechu ayana aga and maria soledad martinez peria. Brief on operationalizing financial inclusion at the afdb. International remittances and financial inclusion in subsaharan africa.
Regulatory impact on mobile money and financial inclusion in. Beck and cull 2015 observe that african banking systems are less inclusive than those outside africa. Pakistan with more than 180 million adults but only 1 in 10 9% financially included, pakistan is one of the largest unbanked countries in the world. While financial inclusion the adoption, usage and sustainability of financial services is generally linked to socioeconomic development, it faces numerous challenges in south africa. Pdf barriers of financial inclusion in subsaharan africa. Mobile drives financial inclusion in africa, growing 20% in. This paper examines barriers to financial inclusion across subsahara africa ssa using the 2014 global findex dataset from the demandside perspective. Regulatory impact on mobile money and financial inclusion. Launched in 2011, it includes more than 100 financial inclusion indicators in a format allowing users to compare access to financial services among adults worldwide including by gender, age and household income. Assessing financial inclusion advances in subsaharan africa. Trade unions and financial inclusion the case of south africa. Labour unions and financial inclusion in south africa. In bridging the great divide, we explore the evolving role of digital innovators and regulators as markets move towards greater financial inclusion. As financial inclusion can contribute to alleviate poverty and boost economic growth, understanding the determinants of financial inclusion in africa is a major issue.
This is according to a new report from the boston consulting group a usbased management consulting firm which shows that south africas financial services sector has mostly excluded lowincome consumers. One way to improve the wellbeing of south africas population is through financial inclusionthe adoption, usage, and sustainability of financial services. Extending financial inclusion in africa 1st edition. Strategies for optimising financial inclusion in south africa. We have worked together to advance financial inclusion since 2008. While formal financial institutions offer an array of financial services, this update focuses on formal payments, savings, and credit. As africas largest economy, nigeria has potential to drive consumers toward financial inclusion, yet internal strife and economic instability make progress uncertain. Download the little data book on financial inclusion.
Financial inclusion in india an assessment1 overcoming poverty is not a gesture of charity. An integrated framework for financial inclusion of vulnerable communities in south africa s regulatory system reform. Second, it uses the global financial inclusion indicators global findex database to characterize adults in africa that use formal and informal financial services and identify the barriers to formal. Credit suisse is a founding partner of the center for financial inclusion at accion. Financial inclusion indicators for rural and urban population in africa 85 figure v. Apr 11, 2017 financial inclusion is important but, in south africa, is not always a force for good tweet this athough 70% of south africans have a bank account their actual use is far lower tweet this south african policymakers need extend the benefits of financial inclusion more widely tweet this. Financial inclusion is important but, in south africa, is not always a force for good tweet this athough 70% of south africans have a bank account their actual use is far lower tweet this south african policymakers need extend the benefits of. Banking in subsaharan africa european investment bank. The south africa financial inclusion workshop successfully brought together policy makers, regulators and the financial services industry for a focused discussion on the challenges impeding greater and more beneficial financial inclusion in south africa. An integrated framework for financial inclusion of vulnerable communities in south africas regulatory system reform.
938 1335 800 1538 693 1423 1579 1002 496 994 391 187 1465 1528 1656 231 1192 20 581 1401 395 614 575 1401 1312 1378 1166 1420 1488 1106 228 653 1275 688 1446