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SA still strong in financial inclusion


South Africa has scored well for financial inclusion, thanks to strong mobile capacity and formal financial account ownership.
This is according to the “2016 Financial and Digital Inclusion Project (FDIP) Report: Advancing Equitable Financial Ecosystems” from the Centre for Technology Innovation at the Brookings Institution.
The FDIP evaluates commitment to and progress toward financial inclusion across a set of 26 geographically, politically, and economically diverse countries, including South Africa.
As authors John Villasenor, Darrell West, and Robin Lewis write: “Evaluating progress toward adoption of affordable formal financial services matters because financial inclusion is a key ingredient in promoting household welfare and broader economic development.”
And, with approximately 2-billion adults around the world lacking access to formal financial services, there is room for a great deal of improvement globally.
This year’s report, the second in an annual series, measures countries on four “dimensions” of financial inclusion: country commitment, mobile capacity, regulatory environment, and the adoption of traditional and digital financial services.
South Africa received 78% of the total possible points across all four dimensions, meaning it ranked third out of 26 countries on overall score.
Other interesting findings pertaining to the country include:
* South Africa’s strong performance on the 2016 FDIP scorecard is primarily driven by its strong mobile capacity levels and high levels of formal financial account ownership.
* South Africa’s National Development Plan identifies an objective to raise the share of the population with access to transactional banking services and savings facilities from 63% in 2011 to 90% in 2030.
* In May 2016, Vodacom M-PESA’s service was shut down in South Africa after having gained far fewer than expected clients since its launch in 2010.
* Regulatory constraints and challenges regarding distribution and marketing have been cited as contributing to low levels of mobile money adoption.