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Scale of cash economy in South African townships stuns FirstRand

Mount Equity Group Tokyo, Japan > News > Markets > Scale of cash economy in South African townships stuns FirstRand

JOHANNESBURG, June 18 (Reuters) – FirstRand (FSRJ.J) has found offering banking to cash-only businesses in South African townships trickier than expected, but the firms involved are also far bigger than it realised.

Africa’s biggest lender by market capitalisation announced the takeover of financial technology firm Selpal in March, with the aim of capturing a greater slice of the township economy.

Millions of people live in townships, which were areas designated for non-whites under apartheid and are often satellites of South Africa’s major cities.

Wealthy residents, golf courses and shopping malls are also now a feature of the country’s most populous township, Soweto, near Johannesburg, as well as a large poorer population living hand-to-mouth in often cramped conditions.

Townships are also home to millions of firms from tiny informal shops to big wholesalers, historically ignored by major banks in South Africa, which make up a…

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