Micro credit and the transforming of uncertainty since 1976: International lessons for South Africa

Abstract

The formal banking system plays a pivotal role in the delivery of financial services, particularly credit. However, the delivery of credit to poor households in South Africa by the formal banking system is hampered by the existence of irreducible uncertainty. The article analyses a sample of successful practices in different countries to determine the genotype structure in these cases that support specific social technology and the minimalist solidarity group lending method, to transform financial uncertainty that cannot be solved by the market mechanism and even brokerage institutions like banks. Based on the findings, this article recommends that existing social technology can be developed in an environment created and conditioned by a proposed system of constituents or principles, to give the poor access to low-cost credit in South Africa.