First National Bank said on Monday it had partnered with Selpal, a South African fintech company that operates specifically in townships, to boost the financial inclusion of the informal economy.
Selpal is a technology start-up that has developed an integrated system connecting informal retailers such as spaza shops (community grocery stores) with fast moving consumer goods (FMCG) suppliers, wholesalers and brands.
The user-centric platform was designed and built using direct observations, engagements and understanding of the pain-points that various users experience along the entire FMCG value chain in the informal sector, from manufacturer to consumer.
With 50 percent of South Africa’s urban population living in townships, the ecosystem supporting these communities warrants significantly greater focus from the banking sector, FNB Business CEO Michael Vacy-Lyle said.
“We refer to this opportunity as the “unseen economy” – the opportunity space that most call the informal sector or the township economy,” Vacy-Lyle said.
“These businesses range from survivalist businesses to often highly organised and sizeable SME (small and medium enterprise) operations. At FNB Business we are of the view that this business segment of the South African economy has been ignored for far too long.”
Statistics show that there are around 30-40 businesses per 1,000 people in townships.
FNB estimates that this translates into around 800,000 to one million businesses which are under-serviced from a banking perspective mainly due to cash being the predominate form of payment for them.
“Access to financial services is critical for the growth of any economy and these businesses should be included into the financial system. Transactional banking, investing, lending and insurance opportunities exist in this unseen space” said Vacy-Lyle.
Selpal CEO and co-founder Stephen Goldberg said the company, using proprietary hardware and software, created a network of partner store traders which it equipped with point-of-sale devices allowing them to view, order, pay for and sell stock and value added services without the store-owners needing to leave their shop.
“It also changes the way that their customers buy from them, extending the benefits and extra value to the end consumer,” he said. “Our partnership with FNB Business will help expand our network and supercharge our growth.” (via African News Agency)