TMI | THE SOUTHAFRICANTREASURER 19 NEXT GENERATIONTREASURY South Africa has a unique banking structure. On the one hand, its highly regulated and compliant environment ensured that the country was largely protected from the 2008 financial crash. However, these same regulations and compliance environments make it commercially unviable to service smaller clients with little or no track records and insufficient assets such as fixed property that can be leveraged as collateral. This means that currently, the banking sector is not structurally suited to service the poorer, remote and rural areas of the country. High fee structures, lack of financial education, and an aversion by banks to retail credit, The banking and finance sector needs to urgently address unbanked and underbanked business owners in order to jump-start the South African economy. By Dhesegan Govender, Head, Group Treasury and Debt Capital Markets, SasfinHoldings which is considered higher risk, are also contributing to the fact that somany entrepreneurs and small businesses in our country – andmost developing economies – are still unbanked or underbanked. The challenge is that these businesses are the catalyst in any economy for job creation and with limited access to banking and financing, these job opportunities are not realised, which has a further negative impact on the GDP and the economy. This makes it all the more important to start addressing the fact that many entrepreneurs cannot access the banking products and funds they need to launch and grow their businesses. TheUrgent Call to Bank theUnderbanked
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