The role of financial technologies in financial inclusion in South Africa.

Abstract

South Africa has a history of exclusion and exploitation of the majority by the minority. The post-apartheid dispensation has involved redress and ensuring inclusion of those historically excluded. The financial services sector is critical for inclusion, at least as far as banking services are concerned. Technology has played a significant role in the transformation of the financial services sector, ensuring that the previously excluded or underserved consumers receive banking services. It is in this context that the paper examines the role of financial technologies (fintechs) in financial inclusion in South Africa, drawing from qualitative research that was carried out by interviewing 18 industry experts and 17 financial services customers. The findings confirm that fintechs enhance financial inclusion by creating access to financial services for previously excluded people and to small businesses, among other advantages brought about by and through fintechs. The paper argues that fintechs play a significant role in expanding the reach of financial services and contribute to the achievement of some sustainable development goals. Therefore, policies and initiatives aimed at broadening access to financial services should leverage through fintechs.