A Legal analysis of the use of innovative technology in the promotion of financial inclusion for low-income earners in South Africa
Abstract
The promotion of financial inclusion is important for the
combating of financial exclusion in many countries, including
South Africa. Nonetheless, most low-income earners living in
rural areas and informal settlements are still struggling to gain
access to basic financial products and financial services in South
Africa. This status quo has been caused by a number of factors
such as the absence of an adequate financial inclusion policy,
the geographical remoteness of financial institutions to most low-income
earners, rigid identity documentary requirements, a lack
of access to reliable and affordable Internet connection by low-income
earners living in informal settlements and rural areas, a
lack of financial illiteracy, the high costs of financial services,
unemployment and poverty, over-indebtedness, and cultural
and psychological hindrances to low-income earners in South
Africa. Consequently, these factors have somewhat limited the
access to financial services offered by financial institutions to
low-income earners living in rural areas and informal
settlements. In many countries, including South Africa, the
financial sector is relying on innovative technology, especially in
banking institutions, to aid in the offering of financial services to
their customers. It is against this background that this article
discusses selected legal and related challenges affecting the
regulation and use of innovative technology to promote financial
inclusion for low-income earners in South Africa. The article
further discusses possible measures that could be adopted by
the government, financial institutions and other relevant
regulatory bodies to promote the use of innovative technology to
combat the financial exclusion of low-income earners in South
Africa.
Collections
- PER: 2021 Volume 24 [71]