The Kasi Economy: A Dirty Little Secret to SA’s Economic Growth?
It’s time to face the music: the informal or "kasi" economy is the real MVP in South Africa. It’s a dirty little secret, but it’s estimated to contribute a whopping 42% of South Africa’s GDP, with a compound annual growth rate of a staggering 14.17%. The question is, how do we unlock its true potential?
The Cash-Based, Cash-Only Conundrum
The kasi economy thrives on cash transactions, which is both a blessing and a curse. On one hand, it allows entrepreneurs to avoid bank fees and over-taxation, but on the other, it leaves them vulnerable to theft and exploitation. More importantly, it prevents them from accessing secure and affordable credit to expand their businesses.
The SME Funding Gap: A Slap in the Face to Innovation
The informal sector is plagued by a significant SME funding gap, with entrepreneurs resorting to loan sharks and micro-lenders who charge exorbitant interest rates. It’s a vicious cycle that stifles innovation and hampers growth. What’s needed is a more sustainable solution that leverages digital payments to bridge the gap.
Biometric Identity: The Key to Unlocking the Kasi Economy’s Potential
We need to rethink the way we approach financial inclusion in the kasi economy. Biometric identity verification is the answer. Imagine a rural entrepreneur, proud of her vegetable stall, using her face to unlock her mobile banking app and send money to her family. No more cash, no more thieves, and no more worry about being ripped off.
The Future of Banking: A Marriage Made in Heaven
It’s time to reimagine banking for the informal sector. A marriage between fintechs and traditional financial service providers is the key to unlocking the kasi economy’s full potential. By leveraging digital identity verification, we can provide access to credit, improve productivity, and increase salaries.
So, let’s stop speaking in hushed tones about the kasi economy and start recognizing its true value. It’s time to unleash its potential and reap the rewards that come with it.
