South Africa’s informal economy contributes significantly to the GDP at  about 6% and job creation with an estimated 7.5 million employed in the informal economy, compared to 9.8 million in the formal economy. Beyond this, the township economy has been built to solve problems whether it is alleviating food security, providing modes of transport or connecting people to the internet. The informal economy has bridged the gap for social development issues.

For this sector to grow, it requires access to credit and digital profile for their operations. Without a banking profile or business transaction history, entrepreneurs are restricted to borrowing from friends, family, angel investors or micro-lenders at high interest rates. Digital payments with biometrics could help banks securely verify the identity of their customer and extend finance based on the trading history. There is also a challenge of regulation policy that is being set by the government and the recognition of tax contributions by small businesses. 

Guest: Lance Fanaroff - co-Founder and Chief Strategy Officer of iiDENTIFii

Guest: Luvuyo Mncanca - business consultant and a freelance writer