The average South African does not focus on investments and savings, they are deeply indebted and continue with extravagant expenditure. The financial sphere is under pressure and the economic growth is slow. There are too many of these services for a poor country e.g. loans are granted much faster than debt is paid; more South Africans have access to the market with the dawn of a democratic era; brokerages suffer loss of business as consumers do not save or invest etc.
The broker or credit provider in this instance must be registered with the National Credit Regulator (NCR) as a credit provider. A registration fee is payable and annual renewal fees as well. The annual renewal fees are calculated upon the principal debt of the credit provider and the higher the debt, the higher the renewal fee. The National Credit Act 34/2005 regulates the industry. It is argued that any lender in a peer to peer network also needs to register.
This is unknown but the amount of peer to peer lending that took place in 2015 is said to be $13.8 million.
Fintech in South Africa is not as developed as in countries with good & stable economic growth. It has been reported that household debt as a percentage of nominal disposable income edged higher from 71.8% in the third quarter of 2018 to 72.7% in the fourth quarter.
With high competition between providers of the mentioned services, low growth and less consumers, there is not much capital to spend on development of Fintech. Loss/gain of employment must also be taken into account.
Durban, South Africa