Publication: South Africa Economic Update : Focus on Financial Inclusion
Date
2013-05
ISSN
Published
2013-05
Author(s)
World Bank
Abstract
Conditions in global financial markets
have eased since mid-2012, reflecting improvements in fiscal
sustainability and the establishment of mutual support
mechanisms in the European Union (EU), even as the global
economic recovery remains fragile and susceptible to
downside risks. South Africa's growth slowed from 3.5
percent in 2011 to 2.5 percent in 2012, reflecting primarily
the sluggish external environment and domestic labor strife.
Growth declined in 8 of the 10 major subsectors.
Researchers, policymakers, and other financial sector
stakeholders are becoming more interested in the
transformative power of financial inclusion. In South
Africa, expanding access to financial services for
individuals and small enterprises could reduce the
country's persistent income inequality and stimulate
growth. South Africa, as Africa's only G20 member and
as one of the BRICS, plays an influential global role, and
progress in financial inclusion could thus have an important
demonstration effect. While formal financial institutions
offer an array of financial services, this Update focuses on
formal payments, savings, and credit. Financial inclusion is
vital because of the role of financial services in helping
individuals and firms withstand income shocks and smooth
spending. A well-functioning financial system produces and
processes information on investment opportunities and
allocates capital based on these assessments; monitors
individuals' and firms' performance after
allocating capital; facilitates the trading,
diversification, and management of risk; mobilizes and pools
savings; and eases the exchange of goods, services, and
financial instruments.
Citation
“World Bank. 2013. South Africa Economic Update : Focus on Financial Inclusion. South Africa economic update; issue no. 4. © Washington, DC. http://hdl.handle.net/10986/16563 License: CC BY 3.0 IGO.”