FINANCIAL INCLUSION
Financial Inclusion
DOES matter for
economic development
Since the dawn of democracy18 years ago, South Africa has gone through
many reforms aimed at reconstructing the economy into one in which all
South Africans can fully participate and all benefit from.
G
overnment policies and initiatives have been aimed
at meeting the constitutional imperatives of a truly
democratic South Africa. While progress has been
made in building a more equitable society, more still
needs to be done.
Sustainable economic development requires an inclusive
economy, with full financial inclusion being a key component.
Despite the economic achievements of the democratic era, many
South Africans are still excluded from the mainstream economic
activities. Inequality, poverty and unemployment remain obstacles
to the optimal development of the economy. These challenges
require a holistic approach and integrated solutions, where all
stakeholders must work together with government to bring about
social and economic change.
The government objective to ensure that five million jobs are
created by 2020 can be realised if economic growth accelerates.
Reaching that employment goal will itself support further growth.
Financial inclusion plays a critical role in enabling these efforts to
promote sustained economic growth and development, particularly
of the most vulnerable in our society. Financial inclusion specifically
provides a platform to transact and exchange payments for goods
and services, to access credit in order to establish or improve
productive capabilities, as well as offering savings and insurance
services that help the vulnerable to maintain and improve their
human and social capital.
‘…a vital tool that the poor can use to increase their chances to
escape poverty.’
Financial inclusion per se cannot lead to sustainable development.
However, it can, together with job creation, capacity building
and infrastructure development, be a vital tool that the poor can
use to increase their chances to escape poverty. For example, the
simple ability to send children to – and keep them at school – starts
breaking the generational cycle of poverty.
Through the efforts of government, financial institutions and
other stakeholders progress has been made in promoting access
14
THE BANKER
Edition 3
to financial services. The proportion of adults (16 years and older)
using a basic bank account has increased from 30% in 1994 to 63% in
2011, and 50% of the adult population are credit-active consumers.
Consumer protection has also been enhanced through legi