Ntombi arrives before sunrise. By the time the first taxi pulls in, her setup is ready, trays of fresh fat cakes, a loyal base of regulars, and a business that generates around R7 000 a month through sheer consistency and community trust.

Ntombi has a bank account, manages her costs, makes payment to her supplier in cash, and yet cannot get credit from her bank to grow her business.

Not because Ntombi is a bad financial risk, but because the system designed to assess her credit behaviour can’t calculate her credit score as she has no pay slip, no salary credits to her bank account, and no formal employer. In the eyes of South Africa's credit affordability models, she is not credit worthy and Ntombi is not alone.

A system built for someone else

South Africa's formal consumer credit framework was designed around a specific customer profile: salaried, formally employed, with a documented financial track record. These customers exist, but there are an increasing number of people who fall on the other end of the spectrum who need access to credit. For the thousands of people operating in the Kasi economy, home-based entrepreneurs, seasonal workers, and piece-job earners, these tools simply do not apply.  

As Wickus Batt, Manager: Systems Analysis at Altron FinTech puts it: "The question our sector needs to answer is how to create a structure for unstructured financial footprint consumers, to fairly assess people in underserved communities."

Ntombi pays her rent every month, replenishes ingredients and manages her cash float carefully enough to stay profitable. The problem is that none of this leaves a trace that formal affordability models are built to recognize.

There is a framework to serve her, but it is unknown and not marketed well. Developmental credit, introduced under the National Credit Act, was designed to overcome the requirement for credit history in assessing low-income and micro-enterprise applicants. But in practice it remains a small and underutilised segment of the South African credit market. Most businesses avoid it, deterred by the complexity of assessing non-traditional income streams and more importantly, the perceived risk of lending without a conventional financial footprint.

The scale of what that hesitation leaves on the table is significant. South Africa's informal sector accounted for 19.5% of total employment in the fourth quarter of 2024, and 1.9 million South Africans were running non-VAT registered businesses in 2023, up from 1.5 million a decade earlier.

Informal retail accounts for roughly 30% of South Africa's total retail market, and as much as 40% to 50% of grocery sales in township communities. However, more than 70% of consumers are reportedly declined access to formal credit channels, pushing vulnerable South Africans into informal and often illegal lending markets where the protection of the law does not apply.

So, even though the regulatory infrastructure to serve the underserved exists, innovation and the appetite to use it is desperately needed.

Not unbanked, just unreadable 

Many of these earners do have some form of banking; a transaction account used for certain purchases or savings. They also have access to suppliers and a track record of purchases and payments at these institutions. What they lack is a formal income profile: a regular, documented salary credit that satisfies the system's criteria. This distinction matters because the problem is not absence from the financial system, it is the illegibility within it.

The result is a market caught between two inadequate options. Formal lenders who cannot approve them, and unregulated lenders who will, but at rates and collection practices that leave borrowers worse off. That is not a market gap. It is a structural failure. And exclusion does not protect people from debt. It just pushes them toward worse debt.

What the back end looks like when payments are instant

When payments are not instant, the operation runs on lag. Reconciliation happens in batches and decisions are made on yesterday's information. When payments are instant, that changes fundamentally. Picking and dispatch happen on certainty. Reconciliation becomes a continuous, automated matching process. The entire order-to-shelf cycle compresses, just-in-time replenishment becomes viable, and buffer stock can be systematically reduced.

Accurate measurement is the real unlock

The solution is not to change how people earn. It is to build models that can finally see what has always been there.

What the credit industry needs is a new assessment framework for unstructured financial footprints, one that draws on rent payment patterns, supplier relationships, cash flow consistency, and community financial reputation. This is not a minor product tweak. It requires a genuine rethink of what financial evidence means and who gets to define it.

Trust is important. This community has been underserved, overcharged, and overlooked for long enough that skepticism toward formal financial institutions is entirely rational. Better tools mean nothing without the patient community work to earn the right to use them.

What good looks like for a first-time borrower 

For someone accessing formal credit for the first time, the experience needs to feel safe, simple, and genuinely educational. Not intimidating. Not drowning in fine print.

Vaughn Hechter, Head Customer Services puts it plainly: "The key is simplicity, ease of use, affordability, easy access from a trustworthy, registered institution that can stand in the open and say: we can actually help you."

That means understanding what repayments look like and what every expense is. SMS nudges, basic budgeting support, no penalties for early repayment, rewards for responsible behaviour. The consumer who walks out feeling informed and in control is the one who re-engages with the formal system. That first experience is everything.

The industry's moment

South Africa cannot keep designing its financial system for a customer profile that excludes the majority of the people that drive the economy. The credit industry has a genuine opportunity to build the measurement infrastructure that does not yet exist, meet entrepreneurs where they are, and be the trustworthy alternative that currently does not exist for them.

Ntombi at the taxi rank is not a charity case; she’s a creditworthy customer the system has not yet learned to see. The industry's task, and its opportunity, is to build the tools that finally make her visible.

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