Appraisal of Financial Inclusion in South Africa: Proposing the Agent Banking Model Implemented in Malaysia

Author: MG Van Niekerk

ISSN: 1996-2185
Affiliations: Senior Lecturer, University of Limpopo
Source: South African Mercantile Law Journal, Volume 33 Issue 3, 2021, p. 447 – 469


Financial inclusion is a burning issue around the world, especially in emerging markets such as South Africa. Its importance lies in the fact that it will effectively reduce inequality in this country in the long term. This contribution traces formal financial inclusion measures in South Africa. The transformation to financial inclusion after 1994 increased inclusion from 61 per cent in 2004 to 93 per cent in 2018.  The article highlights the fact that when people use bank accounts as mailboxes (where all money is withdrawn as soon as it comes into the account), some issues need to be addressed to ensure that they are properly banked. Indications are that only 48 per cent of all adults in South Africa can be considered to be properly banked. In South Africa, financial inclusion was explicitly legislated for the first time by the Financial Sector Regulation Act 9 of 2017. This article assesses the role of agent banking — the provision of financial services through agents or third-party intermediaries on behalf of financial institutions — in increasing financial inclusion in Malaysia. The Malaysian agent banking model could be beneficial to South Africa’s efforts to ensure that more people have access to a bank account that they can use regularly.