South Africa Economic Update: Focus on Financial Inclusion

This paper assesses the extent of financial inclusion in South Africa using an evidence-based analysis. It seeks to enrich the debate on financial inclusion and bring South Africa’s policymakers, researchers, and other concerned stakeholders closer to financial innovations and provide sustainable solutions. It covers the following sections:

• Recent economic developments and global economic prospects with a focus on yields on government bonds, capital flows to developing countries, industrial production, business sentiments, and commodity prices;
• Economic situation in South Africa in terms of growth, capacity utilization, business confidence, labor markets, inflation, fiscal and monetary policy, and the external sector;
• Growth prospects in South Africa and the various domestic and external risks involved;
• Financial inclusion landscape with a focus on access to and use of formal bank accounts, comparison with financial penetration in other countries, barriers to formal account use, and the various uses of credit in the country;
• Challenges and opportunities, with case studies from comparable countries to show potential approaches that South Africa can consider for enhancing financial inclusion.