How private equity can foster financial inclusion in South Africa

South Africa has one of the most sophisticated financial systems in Africa, with financial sector assets exceeding 333% of GDP. Yet inclusion remains largely superficial.

A 2023 BrandMapp survey estimates that over 13 million individuals in South Africa earn between R22,000 and R40,000 per month. They are digitally savvy and economically active, with over 80% making use of savings or investments (BrandMapp 2025), but are often excluded from tailored financial advice that aligns with their personal circumstances and ambitions. For individuals earning below R22,000 per month, access to tailored financial planning and advice is almost non-existent.

For financial product providers, intermediaries, and institutional investors, the scale and latent demand within South Africa’s lower-to-middle income segment present a structurally significant growth opportunity. The FSCA’s Financial Sector Outlook Study (2022) confirms that while 81% of adults hold bank accounts, 40% of low-income accounts remain dormant, and over 50% of credit-active consumers are over-indebted, reflecting a persistent mismatch between product access and effective financial engagement.

The commercial challenge, and opportunity, therefore lies in engineering scalable distribution and advisory infrastructure that integrates digital delivery with trust-based engagement, enabling inclusive participation without compromising profitability. For investors, this represents a frontier market dynamic: large addressable demand constrained not by capital scarcity, but by the absence of interoperable, impact-aligned systems capable of converting financial access into sustained financial wellbeing.

Alongside financial product providers, intermediaries, and advisors, investors globally, such as private equity firms, have also identified the potential that this underserved market segment represents – a unique opportunity to meet a critical social need, in a financially sustainable manner.

What do PE firms look for when evaluating such solutions?

Southern Africa-focused private equity impact investor would typically apply the following filters when evaluating companies building solutions for this underserved market:

• Problem relevance: Is the venture solving a systemic issue - such as access to financial planning - not just a market inefficiency? Investors want the systemic issue addressed, not the product. Frame your business as a response to that issue.
• Scalability: Can the model grow without diluting its core value proposition? Is technology used to extend reach while maintaining quality? Technology should enable reach, but the model must deliver consistent value at every level.
• Execution discipline: Does the founding team combine lived experience with operational rigour? Are they solving from within the problem, not from above it? Scaling impact often requires navigating pricing, access, and margin tensions. Investors respect founders who manage these openly.
• Outcome orientation: Is success measured in tangible improvements - such as debt reduction, business formation, or asset ownership - rather than vanity metrics? Investors are increasingly rigorous. Be prepared to report on both financial performance and social outcomes. To show how solutions improve lives or livelihoods - not just how many users are acquired.

These criteria help distinguish ventures with real commercial and impact potential from those that simply market well.

A case in point: Lifecheq

In 2024, Summit Africa, through its Summit Private Equity Fund, invested R160 million of growth equity capital in Lifecheq, a fintech platform offering personalised financial planning, which emerged from a simple but telling insight: most lower-to-middle-income South Africans are sold products, not solutions. The founding team - actuaries and former insurance executives - built a model that starts with the individual’s financial goals and works backward to design a financial roadmap.

Initially serving clients one-on-one, the business scaled by embedding its methodology into partner ecosystems, including insurers and advisory networks. Today, it enables thousands of ordinary individuals to make informed decisions about debt, savings, career moves, and family support.

Conclusion

South Africa does not need more financial products; it needs financial architecture designed for dignity, resilience, and generational progress.

In a tough and uncertain investment environment, companies that tap into real, often overlooked demand, build strong trust with their customers, and attract talent and partnerships that traditional models often cannot are the ones that will help reshape the economy from the ground up.

* Thema is a partner at Summit Private Equity.

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