20 TMI | THE SOUTHAFRICANTREASURER NEXT GENERATIONTREASURY However, consider how this impacts not only the business, but business owners as well. When an individual enters the formal economy, they have access to resources, skills and information that was previously beyond reach. Banking the unbanked and underbanked is not only an economic imperative, it is a social imperative as well. Entering the formal economy brings dignity to the previously disadvantaged. Finding a solution is imperative As financial institutions, we need to understand that traditional banking products are not working for large segments of society, and yet we need to find a way to start supporting the unbanked and underbankedmarket. Technology and digital solutions are a great equaliser. Physical infrastructures that are far from remote and rural business owners become irrelevant and everyone can access the banking products they need. Similarly, digital solutions are far more cost-effective because there are no overheads associated with infrastructure. Without branches, solutions can be far more affordable and therefore accessible. A great banking platform cannot support business owners if it does not support the entire journey, particularly for start-ups who need foundational business and financial support. Particularly for individuals who have not been exposed to financial literacy or small business basics, the ability to track income, expected income, outstanding invoices and cashflow through one dashboard is key. Next, we need to look at dynamic and bespoke products tomeet customer needs. We’re all fond of saying that one size does not fit all, but what does that actually mean?Through collaboration between central banks, development finance institutions, foreign sponsors, and local commercial banks, we can financially enable the underbanked and extend credit facilities to SMEs (small and medium-sized enterprises) that are based on their specific needs and the realities of what it means to operate a small tomidsized business in South Africa. We cannot stop with products and access to funding, however. Financial literacy and business acumen are also key to success. Why is this important? Many small business owners recognise that they have gaps in their business acumen, but they don’t know how to access the information they need. To address this, it’s important for business owners to have access to high quality, free content that offers real-world business lessons and value. In other words, we all need to share what we’ve learnt. The benefits of banking the underbanked The ability for small businesses across our economy and regional centres to flourish are myriad. A healthy economy built on small businesses drives job creation. Job creation alleviates poverty and gives people access to resources, more formalised living arrangements and food security, as well as giving children access to better education. More money circulating through the economy supports GDP growth as well. Ultimately, a healthy and inclusive economy supports positive social outcomes, gives communities dignity andmost importantly, has positive social outcomes. Consider how crime rates would fall, gender equality would rise, women would be more empowered, curtailing GBV (gender-based violence), and the overall desire to contribute positively to society grows when people feel valued, seen and able to support themselves. And all of this is possible through supporting and enabling the creation and growth of small businesses. When we collectively support these entrepreneurs, we will see newmarket opportunities emerging for the private sector, fintech start-ups flourishing and productivity support to larger organisations, enabling their growth as well. Yes, there are many reasons why this sector remains underbanked. We have red tape, regulations, legacy systems, compliance issues and risk factors to consider. But these issues can and should be addressed. We can no longer afford to ignore the unbanked and underbanked. Bringing these businesses into the formal economy through becoming long-termfinancial partners and by providing solutions and not just products is a good start on a path to resolution. n DHESEGANGOVENDER Head, GroupTreasury and Debt Capital Markets, Sasfin Holdings Dhesegan Govender, CA (SA) is Group Treasurer, Member of the Executive Committee and Member of the CEO’s Strategic Office at Sasfin Holdings. He has over 15 years’ experience in Banking and Financial Markets. He oversees all funding, liquidity and capital planning at Sasfin. His responsibilities include Treasury, Debt Capital Markets (DCM), Private Equity and Strategic opportunities. Dhesegan recently concluded a Guarantee Facility (NASIRA) with the Dutch Development Bank (FMO) to extend funding to small and medium-sized enterprises (SMEs), female and youth entrepreneurs and secured an additional Liquidity Facility with the FMO for COVIDimpacted clients. Entering the formal economy brings dignity to the previously disadvantaged.
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