Efforts to strengthen South Africa’s financial sector stability and improve financial inclusion got a boost with the signing of $4.6 million multi-donor Trust Fund program by the World Bank Group and the Swiss State Secretariat for Economic Affairs (SECO), to help the country further implement its financial sector regulatory reform agenda.
The South Africa Financial Sector Development and Reform Program (FSDRP) phase 2 is a five-year program. It will help transform the country’s market structure through the diversification and broadening of the financial sector to better support the growth of the economy and meet the needs of the part of the population that makes little use of the financial system.
According to Noumba Um, World Bank Country Director for South Africa, “this program will support South Africa in tackling existing structural constraints to improve financial inclusion by expanding access to and usage of a range of cost-effective financial products and services available to the underserved part of the population as well as Small and Medium Enterprises.”
The program also aims to safeguard the financial system and consumers by strengthening the crisis preparedness and resolution framework and improving consumer protection and market conduct, as well as targeting reforms which will help to increase finance for the real economy.
Olaotse Matshane, National Treasury Chief Director for Financial Sector Development, “the program will support Government’s comprehensive work agenda outlined in the 2011 policy document, A safer financial sector to serve South Africa better, particularly the implementation of the Twin Peaks model and creation of an inclusive financial sector thus enhancing a competitive and transformed financial sector aimed at serving all South Africans.”
The technical assistance program is implemented in coordination with key implementation partners, mainly the National Treasury, the Financial Sector Conduct Authority, as well as the South African Reserve Bank. The program also links strongly to the World Bank Group’s goal of achieving Universal Financial Access globally by 2020 and is in line with the Group’s Country Partnership Strategy which aims to support South Africa to reduce inequality and promote investments.