On Human Rights Day, let’s add Financial Inclusion to the list of rights that South Africans enjoy

At Vodacom Financial and Digital Services, we believe that financial inclusion in South Africa is a right, not a privilege. Impressive statistics indicating high bank account penetration may suggest that progress has been made over the past few years, yet the potential of broad financial inclusion to reduce poverty and boost prosperity remains unfulfilled.

A recent Boston Consulting Group study that ranked South Africa 149th out of 162 countries in its ability to convert wealth into wellbeing, despite progress made to broaden financial inclusion, brings the problem into focus and saddens me. 

We are convinced that giving individuals and businesses access to affordable financial products and services reduces inequality and boosts economic growth. Our passion is to make this happen. Access to financial services is not a nice-to-have, it is essential. It is a human right. 

Although 80% of the population has a bank account, most transactions are still cash-based. Reasons cited include high bank charges and the potential risk of fraud. In addition, access to business loans is difficult because of the cumbersome paperwork and delays in accessing the funding. Sadly, the Covid pandemic has exacerbated this general sense of mistrust in the formal financial sector. 

But we remain optimistic.

Whilst the hurdles are significant, they are not insurmountable. My involvement with Vodacom Financial Services has convinced me that there is a subtle but clear shift taking place in the South African financial-inclusion landscape: from being an access issue to a digital adoption and usage issue. Smart phone penetration is high, however the adoption of using financial services on smart devices is growing slowly. 

What is our evidence? There are now cost effective digital payment solutions which empower businesses to manage their inventories and receive payments wherever they are; apps are being developed that allow consumers without credit cards or bank accounts to transact using a digital wallet; and online loan solutions that give SMEs approval and funding within 24 hours are already available. 

Absolutely central to this transformation is the convergence of industries, specifically telecommunications and banking. With access to a large customer base, extensive distribution channels and a strong brand presence, the telecoms industry is well-positioned to connect millions of people and drive positive change through financial inclusion. 

Our mission is to place the customer at the heart of everything we do. As we imagine what the post-pandemic economic recovery looks like, it’s clear that the continual advancement of technology, the convergence across industry sectors and development of new partnerships will be key to deepening financial inclusion and hence the wellbeing of the broader South African population. 

“Financial Inclusion” will be entrenched as another absolute right in South Africa, something to celebrate on Human Rights Day.