FI­NAN­CIAL IN­CLU­SION MAT­TERS

The Sunday Independent - - METRO - SIBONGISENI MBATHA Mbatha is pres­i­dent of the As­so­ci­a­tion of Black Se­cu­ri­ties and In­vest­ment Pro­fes­sion­als.

SRI MULYANI In­drawati, an In­done­sian econ­o­mist, once said: “Fi­nan­cial in­clu­sion mat­ters, not only be­cause it pro­motes growth, but be­cause it helps en­sure pros­per­ity is widely shared. Ac­cess to fi­nan­cial ser­vices plays a crit­i­cal role in lift­ing peo­ple out of poverty, em­pow­er­ing women, and help­ing govern­ments de­liver ser­vices to their peo­ple.”

While In­drawati may have said this a few years ago while a manag­ing di­rec­tor at the World Bank, and now she is min­is­ter of fi­nance of In­done­sia, her com­ments prod­ded me to pon­der: Af­ter the Pres­i­den­tial Jobs Sum­mit and the es­tab­lish­ment of the Youth Em­ploy­ment Ser­vices and the In­vest­ment Sum­mit over the past two months, what is the role of de­vel­op­ment fi­nance in­sti­tu­tions (DFIs) in help­ing us es­cape eco­nomic stag­na­tion and poverty and lead­ing us to eco­nomic manna?

Our eco­nomic de­vel­op­ment prospects can im­prove with the strength­en­ing of ca­pac­ity and lead­er­ship, and with the cat­alytic roles of DFIs such as the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC), Na­tional Em­pow­er­ment Fund (NEF), De­vel­op­ment Bank of South­ern Africa, Small En­ter­prise Fi­nance Agency, the Land Bank, the Na­tional Hous­ing Fi­nance Cor­po­ra­tion, In­de­pen­dent De­vel­op­ment Trust, Na­tional Youth De­vel­op­ment Agency, Na­tional Ur­ban Re­con­struc­tion and Hous­ing Agency, Ru­ral Hous­ing Loan Fund, and Mi­cro Agri­cul­ture Fi­nance Scheme of SA.

The na­tion awaits clar­ity on how the IDC and NEF will in­te­grate their strengths and en­able the two in­sti­tu­tions to meet the de­mand for fund­ing by black en­trepreneurs who as­pire to be­come in­dus­tri­al­ists, while es­pous­ing good cor­po­rate gov­er­nance.

Both the IDC and the NEF have been iden­ti­fied by the govern­ment as cen­tral in im­ple­ment­ing rad­i­cal eco­nomic trans­for­ma­tion and de­vel­op­ment poli­cies.

The col­lab­o­ra­tion will also pro­mote broad-based black eco­nomic em­pow­er­ment with a fo­cus on pro­mot­ing black in­dus­tri­al­ists.

This de­ci­sion is in line with govern­ment pol­icy to con­sol­i­date de­vel­op­ment fi­nance in­sti­tu­tions to pro­vide ef­fec­tive sup­port to emerg­ing and ex­ist­ing black en­trepreneurs, and thereby give black South Africans op­por­tu­ni­ties in the econ­omy and help make the econ­omy more dy­namic, com­pet­i­tive and in­clu­sive.

With the res­ig­na­tion of IDC chief ex­ec­u­tive Ge­of­frey Qhena and the pos­si­ble merger of the NEF and IDC, any new en­tity with a new chief ex­ec­u­tive should con­tinue with a man­date to boost growth, stim­u­late in­vest­ment and cre­ate jobs.

For­tu­nately, women have been ris­ing to lead­er­ship po­si­tions in DFIs and should con­tinue to en­joy a fair slice of the main econ­omy. They must be given the op­por­tu­nity to lead and the nec­es­sary re­spect.

To achieve this, the ethos in DFIs has to con­tinue the trans­for­ma­tion.

Just as Wendy Luhabe and Monhla Hlahla chaired the IDC be­fore Busi Mabuza now, women’s skills and po­ten­tial must be recog­nised and treated as sig­nif­i­cant, and prej­u­diced sys­tems must be done away with.

With good lead­er­ship and good cor­po­rate gov­er­nance, DFIs are not only im­por­tant in terms of their po­ten­tial role and rel­e­vance in con­tribut­ing to eco­nomic growth, but also for their po­ten­tial to sup­port in­clu­sive eco­nomic growth.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.