The Southern African Development Community (SADC) on Thursday opened its Financial Inclusion Indaba (conference) in Johannesburg, pledging to enhance financial inclusion in the region.

Although progress has been made, the overall figure of financial exclusion remains unacceptably high in the SADC member countries, South African Finance Minister Nhlanhla Nene said in his key-note speech.

Financial inclusion is the responsible provisioning and use of regulated financial services by segments of society where financial services are needed but not yet adequately provided.

Financial inclusion “is a key element in the development agenda of our region, just as financial exclusion is a significant developmental constraint,” Nene said.

In the recent past, many countries in the region have introduced reforms necessary to construct economies in which all people can fully participate in and derive benefit from, with progress being made in building more equitable societies.

The growth of the region remains robust, with expectations of on average of 5 percent growth over the next three years. But the financial inclusion cannot keep pace with the situation.

“Many of our people still do not have savings accounts, do not receive credit from formal credit providers, and do not have any type of insurance and rarely make or receive payments through formal financial institutions, thereby increasing their financial vulnerability,” Nene said.

From the regional point of view, the SADC has equally made tremendous progress as well, with account penetration in the Sub-Saharan Africa region at 34 percent in 2014 compared to 24 percent in 2011, according to Nene.

Economic activities in the region have diversified over the past decade, attracting increased foreign direct investment and benefiting from rising investment in ports, electricity capacity and transportation, he said.

“However, despite the positive economic prospects of the region, many of our people are still excluded from the mainstream economic activities. The improvements in our economies have not always adequately translated into sufficient opportunities for poor and low-income households to improve their living standards,” Nene noted.

The excluded rely on the cash economy and consequently on less efficient, inadequate and higher-risk financial services, he said.

“Appropriate access to financial services can empower individuals, particularly lower income people, allowing them to better participate in the economy, actively engage in their own development and protect themselves against economic shocks,” Nene noted.

He also stressed the need to approach financial inclusion in a holistic way together with other development programme because financial inclusion alone cannot change the lives of the poor.

The two-day indaba, co-hosted by FinMark Trust, the SADC Secretariat, South African National Treasury and the SADC Banking Association, aims to promote financial inclusion in the SADC region for the purpose of inclusive economic growth and poverty alleviation. Enditem


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