Financial inclusion is severely skewed in South Africa, with higher income groups having more access to a range of financial services such as bank and savings accounts, loans, and insurance products. Those who are financially excluded have more difficulty accumulating wealth – further deepening this divide. But there are ways of overcoming this serious problem according to Zunaid Miya, MD of local fintech company,  Hello Pay.

Some are excluded by circumstance. Undocumented migrants are excluded by regulations such as FICA, while bigger financial institutions don’t accept asylum documents or foreign passports.

Others are excluded by choice. Some don’t want to be part of the formal banking system; others have a bad credit record and believe bank accounts can be drained by creditors; others believe they wouldn’t qualify for financial products and so they never apply.

The perils of financial exclusion are not just fewer opportunities for personal and business growth but also increased risk. People who don’t have insurance, for example, expose themselves to both financial and physical risk. At its worst, then, it impacts health and longevity. Even at its best, it’s simply greatly inefficient – not having banking products means dealing with physical cash, which is cumbersome and tedious.

How then, do we start bridging this divide?

1. Integrate the informal economy. Financial institutions need to acknowledge that a large portion of the South African economy is made up of informal trade. Without circumventing regulatory requirements, there needs to be a framework put in place that considers the circumstances of individuals and businesses in the informal space. These businesses need to be given the opportunity to be included in the formal financial system in a simple, easy-to-understand, and convenient manner.

That means education and awareness. Financial institutions need to embark on marketing campaigns that inform individuals and businesses in this informal space of the financial products and services available to them. In many cases, people simply assume that these products are reserved for higher income individuals and formalised businesses, when that’s not the case.

2. Reframe the ‘debt trap’. There are different kinds of debt and, again, that education is lacking. Bad debt favours consumption. Good debt enables production. When an SME borrows money to build assets, that creates wealth and job opportunities – enriching the economy at large. Consumer lending, however, is not asset-driven and income-generating – and often ends in a debt trap where the borrower is exploited by micro lenders.

We need to reframe debt as a society and enable individuals, small businesses and micro enterprises that have an entrepreneurial flair and the ability to grow to access funding and other financial services. This agenda needs to be driven in the underbanked or unbanked space especially.

3. Make compliance less onerous. Compliance requirements are a hurdle for consumers and SMEs. When faced with reams of paperwork and seemingly endless documents that need to be submitted, compounded by digital illiteracy, many are deterred.

Application processes need to be simplified so that applicants can be onboarded quickly and easily, in turn improving access to financial services and products. At Hello Pay and the Hello Group, we support our customers in overcoming these challenges by providing a simple-to-use digital transaction platform. Furthermore, we have a ground force of salespeople and agents across the country. They drive out to customers and start the onboarding process, collect documentation, and help them meet compliance requirements.

Though financial exclusion is a multi-faceted problem that won’t be solved overnight, these steps would serve to start bridging that divide. And in the most unequal country in the world, the time to act is now.

Drug stock-outs and shortage of medical equipment in health facilities in Rwanda are becoming a thing of the past, thanks to an innovation that is addressing procurement constraints.

Viebeg Technologies, a venture capital-backed Health Tech company, is helping to expand access to affordable health care in Central and East Africa by aiding healthcare facilities in procuring supplies in real-time. It uses artificial intelligence (AI) to manage supply chain processes (from shipping to warehousing, distribution and inventory management) to ensure that healthcare facilities have the precise medical supplies in stock.

The Rwanda Innovation Fund, partly financed by the African Development Bank, invested in Viebeg’s data-driven logistics platform.

Tobias Reiter, Viebeg Technologies Co-founder and Chief Executive Officer, says the firm’s AI-driven medical procurement platform directly connects healthcare providers with manufacturers. This removes brokers and middlemen from the value chain, generating cost savings of up to 40 percent for customers.

“We saw that many medical facilities did not have the right supplies; and also from reports that in Africa, in every five minutes, people are dying from conditions that could be prevented if we had the right medical supplies,” Reiter noted.

The company, which was set up in 2018, works with many health facilities in Rwanda, where two million people have been treated with Viebeg products, according to Alex Musyoka, its Co-Founder and Chief Commercial Officer. It is already making inroads in other parts of East Africa, including Kenya, Burundi and Congo, and serving over 500 facilities. The company plans to expand across Africa, Musyoka says.

Many healthcare facilities in Rwanda laud Viebeg, as they can now find essential products for their specific fields at affordable rates. An example is the Kivu Specialist Clinic, established by Dr. Amol Kulkarni, one of only three maxillofacial surgeons in Rwanda.

Modern equipment is of utmost importance for specialists who treat defects and injuries of the mouth, teeth and jaws, but they are often not affordable in Africa.

Dr. Amol said Viebeg helped his clinic to acquire an orthopantomogram machine (a panoramic dental X-ray of the upper and lower jaw), thereby boosting its cutting-edge capability.  He added: “In four months, the clinic will have fully paid for the new OPG machine. We are considered one of the best-equipped clinics in Rwanda. Viebeg helped me establish my clinic, and now I am confident having Viebeg as my partner to maintain it.”

Similarly, the Ejo Heza Surgical Centre in Kigali needed a new anesthesia machine as their old one had broken down. But they did not have the funds to purchase a new one. “As Viebeg offers special payment terms for products, Ejo Heza became Viebeg’s client and acquired the new equipment within three weeks. This has allowed our facility to continue saving lives,” says Dr. Dominique Savio Mugenzi, Orthopedic Surgeon and Managing Director at Ejo Heza.

“Thanks to Viebeg’s service, we are now procuring our medical supplies and equipment through the platform, and this has resulted in a significant reduction of procurement costs and stock-outs of medical supplies,” adds Mugenzi.

Mukando Cesarie is a patient who has experienced the power of a well-equipped healthcare facility enabled by Viebeg’s innovation. “I was very sick, but with the gynecological machines here, the doctors were able to finally diagnose the problem. Now I am getting better after four surgery sessions. I am thankful for these services,” she said and expressed satisfaction with the attention she received at the Kigali-based Best Care Hospital in July 2022. She previously underwent a 10- hour surgery at a local hospital, but her condition worsened because the facility lacked the necessary equipment to diagnose her accurately.

Viebeg’s annual revenue increased from $80,000 to $180,000 six months after the funding from the Rwanda Innovation Fund, representing a 125 percent growth. Musyoka projects that the figure will grow to $2.5 million by the end of 2022.

Apart from improving revenues, the funding has enabled the company to, among other things, conduct training for its employees, access working capital, and employ more workers.

The African Development Bank invested $30 million in the Rwanda Innovation Fund. The Bank’s support aligns with the country’s National Information Communication Infrastructure (NICI) III Plan, which underscores the importance of ICT in improving service delivery to citizens.

Dr. Abdu Mukhtar, the Bank’s Director for Industrial and Trade Development, said: “Digital innovation can transform sectors, but it needs investment.  Viebeg is a fantastic example of what can be achieved with the right mix of innovation, entrepreneurship, and financial backing.  It is telling that the Rwanda Innovation Fund, initiated by the Rwandan government and financed, in part, by the African Development Bank, has been catalytic in the development of Viebeg. Local investment in a local business has brought transformative local results. It is a partnership model that can play well in other markets.”