Co-operative banking: A catalyst for inclusive growth in SA

Over 80% of South Africans still use cash.

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As South Africa’s payments landscape evolves, integrating informal and co-operative banking institutions into the formal financial system remains a critical barrier to inclusive economic growth. MoData, a payments technology enabler with deep roots in cash and digital payments infrastructure, offers scalable solutions, strategic consulting and ecosystem engagement, which can help bring key stakeholders like co-operative banking institutions into the fold.

Over 80% of South Africans still use cash. What does that mean for digital inclusion?

Financial inclusion is often framed as access to financial services. For Russell Stewart, Kevin Austin and the MoData Modern Payments team, it means enabling digital integration – supporting the onboarding of co-operative banking institutions into regulated payments environments where accountability, documentation and compliance are not optional but essential.

“Inclusion isn’t just about access – it’s about accountability, documentation and integration into the formal system through simple-to-use, cost-effective and managed solutions as a service,” said Stewart, Payments Specialist at MoData.

The Small Enterprise Development and Finance Agency (SEDFA) has a bold strategy for 2025-2030: act fast on growth opportunities, streamline operations and reach underserved communities. The strategy emphasises empowering small enterprises, expanding financial inclusion and building a capable, ethical and developmental financial sector that creates jobs and reduces poverty. MoData’s mission aligns with this ambition – bringing the tools, tech and expertise to make it real.

South Africa’s financial ecosystem is composed of two distinct but interconnected domains: the formal and informal financial ecosystems.

• Formal sector: Banks, credit unions, insurance companies, licensed fintechs and payment service providers. Here, onboarding, documentation and compliance are mandatory, with regular reports and audits required.
• Informal sector: Tuckshops, hairdressers, spaza shops and informal savings and stokvel groups. These kasinomics rely on cash-based transactions, community trust and limited access to formal banking infrastructure or digital payment rails. Often excluded from the National Payment System (NPS), informal actors face challenges in documentation, compliance and reporting – barriers to formal inclusion.

MoData can help bridge these two ecosystems by supporting co-operative banking institution stakeholders such as the National Secondary Co-operative Bank (NSCB), SACOBA – the Co-operative Banking Sector representative body, and SEDFA. By enabling formal onboarding of informal actors, technology solutions for compliance, secure payments and platforms that connect informal users to formal rails, MoData helps to advance financial inclusion and supports South Africa’s inclusive growth agenda.

• Automated transaction allocation: Streamlined systems that automatically allocate transactions can reduce onboarding friction and accelerate set-up for co-operative banking institutions.
• Co-operative banking institutions ledger: Digital ledger systems extract data from bank accounts, certify individuals as valid members, allocate funds to member profiles and record financial activity for compliance and reporting – enabling transparency and trust.
• Value-added services and deep tech integration: Technologies that speed up transaction processing, enhance reconciliation, detect fraud and enable payment switching are designed to scale with the growth and regulatory complexity of co- operative banking institutions.

MoData is actively engaging with key stakeholders such as PASA, PEM, NPU and PIB to help shape the future of co-operative banking institutions, as well as with fintechs digitising and innovating in the informal payments area. Recent strategy sessions involving MoData banking and payment SMEs have focused on simplifying compliance for co-operative banking institutions, mapping onboarding journeys and supporting documentation processes. These sessions are helping co-operative banking institutions meet Prudential Authority and the SARB requirements and prepare for integration into the formal system.

MoData was invited by Edge Evolve and StratAlign to participate in the SEDFA Co-operative Banking Strategy Workshop, supporting the strategic development of the NSCB. The workshop brought together a diverse group of participants – from legislators and franchise associations to the World Bank and representatives of existing and aspiring co-operative banking institutions. The session focused on reviewing the 2030 Co-operative Banking Sector Strategy, assessing the current state of the sector, and defining clear priorities aligned with the 2030 vision.

“What a privilege for MoData and Edge Evolve to be included in the SEDFA Co-operative Banking Strategy Workshop. We look forward to supporting key stakeholders like SACOBA and the NSCB in their drive to make co-operative banking a success,” said Stewart. 

MoData’s observations from the workshop reinforced its strategic alignment with the PEM and NPU frameworks. The success of co-operative banking depends on technology solutions to onboard members, manage co-operative banking institutions’ financials, open up payment rails, reconcile payments, ensure security through fraud and risk-based solutions and automate regulatory compliance and reporting to the Prudential Authority and members.

MoData’s mission is grounded in its strategic focus to enable the payments ecosystem evolution at all levels through engagement with multiple stakeholders and contribution of expertise and experience in the cash and digital payments space.

By enabling co-operative banking institutions to meet formal requirements and participate in regulated payments systems, MoData is helping build a future where financial services are not just accessible – but accountable, secure and inclusive.

It’s not just about systems – it’s about stories, people and progress.