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FirstRand's First National Bank and a young financial technology firm in South Africa are teaming up to connect informal township traders with rapidly changing consumer goods companies.
FNB seeks to penetrate a market that it estimates could include up to 1 million businesses that have been largely ignored and fall into the "invisible economy," said the lender based in Johannesburg in a statement. Cantons were created during apartheid on the outskirts of urban areas to separate blacks from whites until the end of racial segregation in 1994.
"With 50% of South Africa's urban population living in townships, the ecosystem supporting these communities deserves significantly greater attention from the banking sector," said Michael Vacy-Lyle, chief executive of Business ETF. The lender estimates that about 300,000 of these traders are "survivalist" in nature, employ at least three people and rely on cash payments, he said.
The company has partnered with Selpal, which connects informal traders ranging from bars and grocery stores to hairdressers and micro-makers, the statement said. Merchants have a point-of-sale device allowing them to make payments "that allows them to view, order, pay and sell inventory and value-added services without the owners of store never need to leave their shop, and release additional income, "said Stephen Goldberg, CEO of Selpal.
"It also changes the way their customers buy from home, expanding the benefits and added value for the end consumer," he said. "Our partnership with FNB Business will help expand our network and boost our growth."
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