March 4, 2024


The Southern African Development Community (SADC) Financial Inclusion (FI) Subcommittee convened a meeting in Johannesburg, South Africa on 19-20 February 2024 to review progress on the implementation of the SADC Strategy on Financial Inclusion and Small to Medium Enterprises (SMEs) Access to Finance 2023-2028. 

The SADC Financial Inclusion Strategy and SME Access to Finance aspires an inclusive, stable, and innovative SADC financial system that empowers individuals and businesses to access and use quality financial services, to contribute to industrialisation, inclusive growth, and resilient, sustainable economic well-being in line with the SADC Vision 2050. 

In his opening remarks at the FI Subcommittee meeting, Mr. Sadwick Mtonakutha, Director of Finance Investment and Customs (FIC) at the SADC Secretariat said technology will play a primary role in widening access to financial assets, increasing transaction volumes, fostering the financial integrity of the SADC region, and tracking objectives of the SADC Strategy on Financial Inclusion and SMEs Access to Finance 2023-2028. 

Financial Inclusion is a significant result area of the Support to Improving the Investment and Business Environment (SIBE) Programme, which is a five-year Programme, implemented by the SADC Secretariat and financed by the European Union under the 11th European Development. 

The Subcommittee was informed that the SIBE Programme has managed to implement 83% of the Financial Inclusion Work Plan (2021-2023). In collaboration with FinMark Trust, the Programme has made significant progress in tracking financial and economic inclusion in the SADC region through Finscope Consumer and MSME Surveys. To date, 119 million individuals representing 77% of adults in the region are financially included both in formal and informal financial products or services in comparison to 57% of financially included adult population in 2011. 

The Programme is embedding technology at the core of its mission and has developed a SADC Financial Inclusion Information Portal that will be the central repository for the full spectrum of FI data in the region to enhance SADC financial integration and financial inclusion and will be the primary coordination and monitoring mechanism. 

Member States are now able to access FI data ranging from FI access, usage, trends, quality and impacts of financial inclusion to reports, tools, and guidelines on various FI topics and initiatives. The Portal will also assist in cross-learning between Member States, and measure progress on the implementation of the various financial inclusion strategies in the Region. 

The Payment System Subcommittee under the Committee of Central Bank Governors (CCBG) in SADC is reviewing and upgrading the 2016 SADC Mobile Money Guidelines to assist Member States in their reform of regulatory frameworks that support the embracing of innovative offerings in the payment system. 

SADC has made progress in the implementation of SADC regional infrastructure platforms and projects to support FI and SMEs’ access to finance. The SADC-Real-Time Gross Settlement (RTGS) which was commissioned in 2013 realised settlement of over three million transactions valued at 12.63 trillion South African Rands (ZAR), equivalent to 671.95 billion US$ on the platform. The SADC-RTGS has 90 central and commercial banks from 15 SADC Member States that are electronically linked to effect cross-border payments and settlements in real-time according to the October 2023 report. The SADC-CCBG launched the SADC-RTGS Renewal Programme to focus on leveraging technological innovations that expand availability of digital services to all sectors of society for the benefits of the region as well as reduce risks to the payments ecosystem.

The SADC-RTGS low value credit scheme is implementing the multicurrency initiative and the SADC Transfer Cleared on Immediate Basis (TCIB) to strengthen financial inclusion of SMEs. Thirty-four participants from 10 SADC Member States registered as provisional members on the TCIB scheme while effort to onboard the US Dollar and the Angolan Kwanza is underway.  SIBE is undertaking TCIB Awareness Campaigns in Member States and is engaging BankserveAfrica, the SADC Banking Association and Member States to increase the adoption rate of the TCIB Scheme. 

The cost of cross border remittances has been reduced by 2.2 percent from an average of 9.4 percent per transaction in 2019 to about 7.2 percent in 2021. Volumes of remittances from South Africa to the rest of SADC have declined from 15.1 million transactions in 2021 to 10.9 million transactions in 2023. The South Africa to Malawi corridor registered the largest rate of decline with a drop of a 149% in volumes between 2021 and 2023. Digital remittances from South Africa to the rest of SADC also declined by 22% between 2022 and 2023. To this end, SADC Member States have finalised a research project on Fintech development to facilitate access to digital payment services, and published a report in February 2023 outlining progress, gaps and opportunities for the region.

The SIBE Programme strengthened the capability of SADC Stock Exchanges in developing products that motivate Small and Medium-Enterprises (SMEs) to participate in capital markets and is in the process of creating interconnectivity of stock exchanges within the region.

Financial integrity is the bedrock of payment systems therefore the CCBG is aiming to develop a programme that will establish an integrated eKYC registry for Member States anchored by a SADC-wide KYC and identity information sharing framework. In the past two years, Lesotho has piloted domestic and regional use cases of its digital national ID system to provide learnings on what regional data sharing for eKYC would entail.

SADC in collaboration with the Industrialization and Women Economic Empowerment (IWEE) Project funded by the German Government through Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), is promoting equitable access for women-owned businesses and women entrepreneurs through the Financial Inclusion Gender Action Plan. The SADC Secretariat is also collaborating with United Nations (UN) Women on the consolidation of financial inclusion statistics and development of associated training materials. 

The new Five-Year Strategy on Financial Inclusion and SMEs Access to Finance (2023-2028) and its Implementation Plan was adopted by the Council of Ministers, in August 2023 hence the SADC Secretariat is directing effort at implementation of regional and national agendas. A total of 13 Member States are at different stages of developing and implementing National Financial Inclusion Strategies and or Roadmaps, in line with the new five-year SADC Strategy on Financial Inclusion and Small to Medium Enterprises (SMEs) Access to Finance 2023-2028.