South Africa faces a stark financial inclusion challenge, deeply intertwined with its socio-economic landscape. Despite the strides made in expanding banking services, 15% of the population remains unbanked and on the margins of the financial system, a shortfall further compounded by a lack of money management skills.
A new generation of fintechs is rising to this challenge, marrying advanced payments technology with a deep understanding of the root causes of financial illiteracy to boost education for communities across South Africa. With fintechs like Sticcit and Blackbullion pioneering new methods to address shortfalls in money management, South Africa is righting the ship by equipping its citizens – especially its youth – with the tools and knowledge to navigate a complex financial world.
The Role of Education in Financial Literacy
Financial literacy, or the lack thereof, is not a challenge unique to South Africa but a global issue that few nations have successfully addressed, with only 51.2% of South Africans able to use a bank account without help. However, as a young and dynamic country, it has the opportunity to lead the charge in embedding financial education into its school curriculum with foundational skills such as budgeting, saving, and understanding credit. This early intervention can empower young South Africans to break the cycle of poor financial decision-making once and for all and get them on the right track to better outcomes in the future.
As it currently stands, only 42% of South African adults are financially literate, higher than African neighbours Zimbabwe (41%) and Namibia (27%) but significantly below the average for major advanced economies (55%).
One trailblazing initiative dedicated to improving this figure through education is Sticcit. This company works with schools to make financial literacy a core part of the learning experience, equipping students with practical skills they can carry into adulthood. Such programmes have a ripple effect: children who understand the basics of financial management are more likely to grow into adults who make informed financial choices. Over time, this can reshape households, communities, and even the broader economy, positioning South Africa as a blueprint for the global effort to tackle financial illiteracy.
Cultivating Healthy Financial Habits
Fintech companies have a pivotal role to play in driving financial literacy through collaboration with schools. Advanced payment technology, for instance, can simplify and enhance accessibility to school-related financial processes. Digital payment systems can make it easier for families to manage tuition payments, access financial aid, or participate in savings schemes tied to educational goals.
These innovations also offer a hands-on way for students to learn about managing money in a digital-first world. By interacting with digital wallets or prepaid accounts for school activities, students can gain practical experience in managing their finances securely and efficiently.
Empowering South Africa’s Digitally Savvy Youth
Over 74% of South Africans have access to the internet in 2024, significantly higher than the world average of 66%, laying a strong foundation for the adoption of digital financial services. However, much of South Africa’s youth are not taught how to use the internet to better manage their money, with the issue significantly heightened in rural areas and urban townships. Blackbullion, a fintech pioneering an interactive financial education platform, is turning the tide and empowering young people to better leverage their digital know-how to access vital financial tools and build healthy financial habits for life.
Blackbullion recently joined forces with the Amathuba Collective, a social enterprise that directly serves and impacts youth from urban underserved communities, to educate its members with interactive courses and tools to help them develop the skills they need to manage their finances. Blackbullion designed its platform to be engaging, easy to use and low in data usage, making it ideal for boosting the financial literacy of young people across South Africa.
Expanding Access to Finance Through Fintech Partnerships
Beyond education, fintech partnerships with traditional financial institutions can bridge the gap in financial inclusion by expanding access to banking, savings, lending and other key financial services. Mobile banking platforms, for example, are revolutionising how underserved populations interact with financial services, particularly in rural areas where traditional banking infrastructure is sparse. These platforms not only provide a gateway to essential financial tools but also offer tailored products designed to meet the unique needs of individuals and communities. Micro-lending, mobile savings accounts and credit-building programs are just a few examples of how fintechs can create meaningful change.
While fintechs provide the tools, financial institutions have the resources and networks to drive widespread change. By investing in community-based educational programs, banks and other institutions can play a direct role in promoting financial literacy. Workshops, mentorship initiatives, and localised financial education campaigns can help demystify financial concepts for adults and families, fostering a culture of informed financial decision-making.
The Path Forward
South Africa is well on its way to building up the financial literacy of its communities, leveraging increased access to the internet and the rise of digital finance to onboard all demographics to the formal financial system.
Fintechs like Blackbullion and Sticcit are accelerating this transition, focusing on overlooked communities to cultivate healthy financial habits amongst communities with low rates of financial literacy, creating an optimistic attitude towards the future of financial inclusion throughout South African society.