Financial Inclusion in South Africa: An Integrated Framework for Financial Inclusion of Vulnerable Communities in South Africa's Regulatory System Reform

Vulnerable communities in developing countries like the poor in South Africa are not included in their country’s formal economy because the poor have little or no access to financial services. As such, the poor struggle to survive, and to capture the interests of the banking industry to provide them with access to affordable financial services. Public-private financial inclusion initiatives have been insignificant or proven unsustainable to include the poor into the financial fabric of their domestic country. This is because financial inclusion initiatives have primarily been defined, and designed as a “social responsibility” by the government and the banking industry without a comprehensive, and committed pathway to sustainable financial inclusion. This paper proposes an integrated framework for financial inclusion, which re-imagines financial inclusion as a “business opportunity” for the South African banking industry to joint-venture with the South African Ministry of Finance. The joint-venture is based on the Irish Financial Inclusion Model, one of the few successful publicprivate financial inclusion initiatives that has been able to grow the participating Irish banks’ customer base, increase revenues, and financially include poor communities as a sustainable untapped source of growth and business development into the formal Irish economy. We propose that with modifications to address challenges that are central to South Africa the new “Twin Peaks South African Financial Inclusion Model” will provide a pathway for millions of financially excluded South African’s to be included into South Africa’s formal economy, and be an integral part of South Africa’s continued growth and development.