South Africa ranked third for dig­i­tal in­clu­sion

The Star Early Edition - - NEWS - Regis Nya­makanga

SOUTH Africa has been ranked among the top three coun­tries in the world for dig­i­tal and fi­nan­cial in­clu­sion by Brook­ings In­sti­tu­tion’s Cen­tre for Tech­nol­ogy In­no­va­tion (Bicti), a Wash­ing­ton-based non-profit or­gan­i­sa­tion.

Fi­nan­cial and dig­i­tal in­clu­sion is de­fined as the dig­i­tal ac­cess to and use of for­mal fi­nan­cial ser­vices by ex­cluded and un­der­served pop­u­la­tions.

South Africa took the third spot in this year’s Fi­nan­cial and Dig­i­tal In­clu­sion Pro­gram rank­ings, with the Bicti hav­ing sur­veyed 26 coun­tries across the globe. Kenya came first, while Brazil and Mex­ico tied for sec­ond place, and Colom­bia, and Uganda tied with South Africa for third.

A re­port re­leased by Bicti said South Africa’s en­abling reg­u­la­tory en­vi­ron­ment for dig­i­tal fi­nan­cial ser­vices was one of the factors that placed the coun­try third in the rank­ings, with 70 per­cent of South African adults hav­ing a fi­nan­cial ac­count.

Low us­age

Another study by the Bos­ton Con­sult­ing Group (BCG) found that while the ma­jor­ity of South Africans had ac­cess to a bank ac­count, us­age was quite low and the sav­ings rate was among the low­est in the world.

How­ever, ex­perts ar­gued that this rate did not cap­ture the sig­nif­i­cant role of in­for­mal sav­ings.

The BCG re­port found that fi­nan­cial in­clu­sion per­cent­ages were rel­a­tively con­sis­tent among men and women. This was col­lab­o­rated by a re­cent FinMark Trust re­port that found a pos­i­tive gen­der gap of 6 per­cent be­tween women and men in terms of bank ac­count hold­ings, which showed a large adop­tion of so­cial grants among women.

South Africa has taken a num­ber of mea­sures to en­sure fi­nan­cial ser­vices are ac­cessed by the ma­jor­ity. These in­cluded the re­cently ap­proved Fi­nan­cial Sec­tor Reg­u­la­tion Bill, which fea­tures fi­nan­cial in­clu­sion among its ob­jec­tives.

In July 2016, the SA Re­serve Bank ap­proved the SA Post Of­fice’s first level ap­pli­ca­tion for a bank­ing li­cence for Post­bank, which en­abled it to of­fer bank­ing ser­vices be­yond the trans­ac­tional and sav­ings prod­ucts it cur­rently of­fers.

The re­port said South Africa should mon­i­tor the rise in un­se­cured lending and con­sider how to best mit­i­gate the risk of over-in­debt­ed­ness, with­out pre­clud­ing low-in­come con­sumers from ac­cess­ing the ser­vices they need to sup­port their well-be­ing

The Econ­o­mist In­tel­li­gence Unit noted in its 2016 re­port that the “on­go­ing shift from rules-based to risk-based su­per­vi­sion was al­ready hav­ing an im­pact on fi­nan­cial in­clu­sion, as banks and other fi­nan­cial ser­vice providers be­came more risk-averse and there­fore less likely to ex­tend credit to low-in­come con­sumers”.

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