The narrative around financial inclusion in South Africa is often framed as one of insufficiency. Critics claim that the goal of full financial inclusion remains out of reach. While this is true to some extent, I believe it misses a crucial point: South Africa has made significant strides in achieving access to financial services. The conversation now needs to shift from whether we can provide access to whether people are actually using these services in ways that improve their lives.
At the 2024 SARB Payments Conference recently, I highlighted this very issue, and tried emphasising that financial inclusion should be seen as a continuum. It starts with access but must progress towards active usage if it is to have any real impact. We’ve largely succeeded in providing access; the challenge now is fostering usage and ensuring it meets the real needs of South Africans, specifically for those who live in poverty.
Financial inclusion alone won’t solve poverty
Financial inclusion is often touted as a silver bullet for poverty alleviation. However, this expectation is misguided. Financial inclusion is not the solution to poverty—it’s a contributor, a tool. It can certainly empower individuals by giving them the means to manage money, access credit, and build assets, but it can also lead to new challenges, like over-indebtedness. If not used responsibly or if financial products are not designed with users in mind, inclusion can deepen financial stress rather than alleviate it.
Does financial inclusion improve people’s lives? Not automatically. Its impact depends on how these services are used. Over-indebtedness, for instance, is a growing problem in South Africa, where easy access to credit has left many poorer. We need to move away from the notion that simply providing access will drive positive outcomes. The concept of: 'if you build it, they will come' is a misnomer. We need to better understand people’s real needs and align services to address those needs rather than blanket-approaching financial inclusion as a one-size-fits-all solution.
South Africa’s dual economy: The real challenge of inclusion
South Africa is a country of contrasts. In many ways, it can be considered two countries in one - the developed, urbanised areas with financial sophistication, and the underdeveloped rural or peri-urban areas where financial exclusion remains a reality. The challenges to real financial inclusion do not lie in the ‘first world’ South Africa but at the bottom of the pyramid—the segment where people are still grappling with basic survival and lack the literacy, access to technology, or resources to meaningfully engage with financial systems.
This is where our focus needs to be: understanding the specific needs of these segments and tailoring solutions that cater to them. Financial inclusion policies that work for urban professionals will not necessarily work for informal traders in townships. We need to learn together and share our successes and failures - including our policymakers, regulators, and the financial industry. Experimentation is essential if we are to develop services that speak to the realities of marginalised communities.
Moving forward: Encouraging usage through understanding
Our task is clear: we must encourage the usage of financial services, but we must do so by taking a demand-side approach. This means moving away from simple access metrics and focusing on whether people are actually benefiting from the services that are available to them. Do these services help them manage risk? Build assets? Improve their standard of living?
We need to engage in an ongoing learning process, where we collectively experiment, reflect, and iterate. Solutions must be adaptive, localised, and responsive to the evolving needs of different segments of the population. This means collaborating across sectors and including the voices of those most affected by exclusion.
At the Payments Conference, the Governor of the SARB, Lesetja Kganyago, said, “Cash may still be king, but the crown is slipping.” As digital payments emerge and reshape the financial landscape, there is a growing opportunity to create real impact—but only if we address the barriers to meaningful usage. Financial inclusion is not merely about ticking boxes; it’s about driving real, lasting change in people’s lives.
At FinMark Trust, we’re making determined strides into the era of Financial Inclusion 2.0 (FI2.0)—a transformative shift in our organisational focus, particularly concerning digitalisation in the informal sector. This strategic direction goes beyond expanding access to financial services; it emphasises creating inclusive, impactful change based on evidence-driven research and analysis. While we’ve made significant progress, there is still much to be done to ensure these advances benefit all South Africans.
Kagisho Dichabe captured it perfectly: “You need to have lived it to understand it.” If we truly want to close the gap, we must first understand the lived experiences of those we aim to serve and design our solutions accordingly. Financial inclusion is about people—real people in the real economy. And it’s time our policies and systems reflected that.