Banking partnerships with township-focused fintech startups, like FNB’s 2018 collaboration with informal-retail platform Selpal, address a segment of the economy banks have historically underserved: the hundreds of thousands of township-based spaza shops and informal retailers operating almost entirely on cash.
Why the township economy remained underserved by formal banking
With around half of South Africa’s urban population living in townships and a large share of local businesses transacting mainly in cash, this segment has historically fallen outside standard banking products designed around formal, bankable, paper-trail-heavy businesses. A specialised fintech platform that already understands the operational realities of spaza shops and informal FMCG retail, connecting them digitally with suppliers and wholesalers, gives a bank a practical entry point into this segment that a generic banking product couldn’t achieve alone.
How this kind of fintech-bank partnership typically works
The fintech startup provides point-of-sale hardware and software that lets informal traders order, pay for and sell stock digitally without leaving their shop, generating a genuine digital transaction record that banks can eventually use to assess creditworthiness and offer formal financial products. The bank, in turn, provides the scale, capital and formal financial infrastructure the fintech alone couldn’t offer, while gaining direct access to a previously unbanked customer segment.
What this means for township-based small businesses
Digitising even a basic function like stock ordering creates the kind of transaction history that can eventually unlock formal credit, insurance and other financial services previously inaccessible to a cash-only business. Township-based traders should view these fintech platforms as a practical first step toward formal financial inclusion, not just a convenient ordering tool, since the digital footprint they build has real long-term value.
Frequently asked questions
Why has the township economy remained underserved by formal banking?
A large share of informal township businesses transact mainly in cash, falling outside standard banking products designed around formal, paper-trail-heavy businesses.
How do bank-fintech partnerships like this actually work?
The fintech provides tools that digitise informal retail transactions, while the bank offers the capital and formal infrastructure to eventually extend credit and other financial products.
What benefit does digitising stock ordering provide informal traders?
It creates a genuine transaction history that can eventually unlock formal credit, insurance and other financial services.
How large is the potential market for banking services in South African townships?
Estimates put it at several hundred thousand to over a million under-serviced businesses, representing a genuinely significant unbanked segment.
Should township traders see fintech platforms as more than just a convenience?
Yes, the digital footprint they build through everyday use has real long-term value toward eventual formal financial inclusion.
Originally published in November 2018. Updated September 2026.
Financial inclusion oversight via the South African Reserve Bank.
Originally published in November 2018. Updated September 2026 to add current guidance and funding support for township-based spaza traders, confirming the financial-inclusion path this 2018 partnership pointed toward is still developing.
