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By Craig Newborn 

98% of South Africans are now financially included – that’s according to the FSCA’s South African Retail Financial Customer Behaviour and Sentiment Report for 2023. But high financial inclusion does not mean that all the work is done.  

I’ve been financially included since I was in high school. By the age of 16 I was running my first real enterprise and, before I finished my studies, had founded and sold three successful companies. I was a fiercely independent pre-graduate engineering student and confident in the progress I’d made in my financial journey until my peers, with post-graduate CA qualifications, recommended a premium, low-cost life insurance product – and I didn’t qualify. I didn’t have the same degree behind me. This is a somewhat privileged version of what financial exclusion looks like, but it was my first experience of not meeting the criteria for inclusion, and it sparked something. I didn’t want anyone to feel that they don’t deserve to have access to something that will benefit them. 

Some 15 years down the line, and despite progress by South African policymakers, regulators and other stakeholders in the financial services sector, consumers across the income spectrum are still demanding better access to finance. According to the FSCA, only half of their survey respondents (50%) see value in the financial products and/or services for which they are paying. Whether the issue is not being able to access credit facilities due to a very specific lending criteria, or not wanting to pay exorbitant fees and interest on traditional credit products, consumers want and need better ways to pay for goods and services, especially with interest rates at a 10-year high and unlikely to go down until at least Q4. 

As an example, Stats SA reports that retail sales during the 2023 Black Friday season – traditionally a time when South Africans make large and high volume purchases – saw a nosedive for the first time since 2020. In contrast, the interest-free buy-now pay-later (BNPL) space grew significantly in 2023, with PayJustNow’s payment volumes shooting up by 80%, and its customer base doubling to 1.3 million. It’s a prime example of how agile fintech’s are adapting to the needs of South Africans across the income spectrum – and especially women. Despite women being rated more responsible than men with their finances, they still face systemic challenges to accessing financial services because of discriminatory policies and cultural attitudes, along with the gender pay gap. We are seeing high adoption of interest-free payment models among women, who comprise 70% of the PayJustNow customer base, and we want to continue supporting her.  

Inclusion demands accountability from providers in the financial services sector. As an industry we need to be doing more to educate consumers.  Its 2024, and we have both the skills and the technology to offer credit or alternatives to credit, responsibly and sustainably.  

For lower income consumers, responsible lending looks like a “low and grow” approach. I believe that everyone should be given a chance to prove themselves, and this is the sweet spot for agile fintech’s in their ability to solve for challenges like financial inclusion. The strategy grants a small initial spend limit to those with little-to-no credit history, based on what a company knows about them – which can be anything from when and where they shop, to who they bank with. Once they’ve proved that they can handle their finances responsibly, their benefits and spend limits increase incrementally. And in some cases, they can even safely build a credit profile.  

For higher income earners, it means not having to pay more than what you see on the price tag for bigger ticket purchases through traditional credit products. And a realisation that you don’t actually have to pay interest at all, as we’ve become so accustomed to.  

By turning the traditional credit model on its head, and reducing consumers’ reliance on credit cards, revolving credit facilities and other expensive credit options, fintech’s are driving better access for South Africans who’ve historically settled for a dissatisfying value proposition or have been unable or unwilling to access financial products. Fostering a healthier financial landscape driven by empowered consumers is a goal that the pre-graduate me will never stop working towards. 

Craig Newborn is founder and CEO of PayJustNow 

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