Deputy finance minister punts SA's informal sector in combating high unemployment

ASHOR Sarupen, the deputy minister of finance, has made a compelling case for the potential of South Africa's informal sector to address the persistently high unemployment rate and emphasised the need for collaborative efforts between the government and the private sector.

- YOGASHEN PILLAY

During his speech at the Global SME Finance Forum, Sarupen noted that while the informal sector contributes significantly to the economy—representing 6% of the Gross Domestic Product (GDP) and providing 17% of employment—it remains largely unsupported, struggling with growth and productivity.

Sarupen said that microfinance is a proven tool for promoting inclusive growth and alleviating poverty.

“By offering small loans and savings accounts, it empowers individuals to start businesses and improve their financial standing. The Grameen Bank in Bangladesh exemplifies this success—providing small loans to individuals, especially women, who lack access to traditional banking,” he said.

“Its group lending model, built on trust and social capital rather than collateral, has been replicated across Asia, Africa, and has even made inroads in the United States—illustrating its global potential.”