A cashless economy helps bridge inequality – lessons for SA
SA can learn valuable lessons from what the Indian government is doing to draw more people into the banking system as a way of alleviating poverty, writes Micheal Bowren
SA can learn from the Indian government’s moves to bank its unbanked population by limiting how much cash that can be drawn at one time, identifying populations with high potential to go cashless, and by subsidising smart phones. Financial inclusion of the poor is key to poverty alleviation, and critical to its success is financial literacy. I recently returned from India, one of the fastest-growing emerging economies, nearly 2.7 times the area of SA but also with vast gaps between rich and poor. India identified where its immediate potential cashless market lies. The population of India is 1.2-billion, of whom about 400-million people are included in the financial sector as they have bank accounts and are saving, investing or borrowing. However, 70% of the population remain unbanked. As the Indian government’s cashless drive gathers momentum these individuals will soon need bank accounts to send and receive money. With a smart phone and internet access or mobile phone signal, all t...
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