Abstract

Despite South Africa’s relatively mature financial system, meaningful inclusion remains constrained by gaps in access to tailored financial advice and long-term financial planning. More than 80% of individuals earning between R22,000 and R40,000 per month actively use banking or savings products, yet few have access to advisory services aligned with their specific life goals and financial realities. This disconnect between participation and capability represents both a social and commercial opportunity.

As a sector-focused, thesis-driven private equity impact investor, addressing social needs such as the lack of financial access for lower to middle income South Africans is part of Summit Africa’s investment focus. Specifically, since 2019, Summit Africa’s R1.6 billion Private Equity Fund I (SPEF I) has been investing in small-to-medium-sized businesses that expand access to financial services, healthcare, and education in a sustainable and inclusive manner.

In this article we explore why improving access to financial services matters, and how Summit’s investment thesis combines impact and returns in a uniquely scalable way.

Engaging The Financially Excluded Market: How Private Equity Can Be An Architect For Inclusion

The case for engaging the financially excluded market

South Africa has one of the most sophisticated financial systems in Africa, with financial sector assets exceeding ¹333% of GDP. Yet inclusion remains largely superficial.

A 2023 BrandMapp survey estimates that over 13 million individuals in South Africa earn between R22,000 and R40,000 per month. They are digitally savvy and economically active, with over 80% making use of savings or investments (BrandMapp 2025) but are often excluded from tailored financial advice that aligns with their personal circumstances and ambitions. For individuals earning below R22,000 per month, access to tailored financial planning and advice is almost non-existent.

For financial product providers, intermediaries, and institutional investors, the scale and latent demand within South Africa’s lower-to-middle income segment present a structurally significant growth opportunity. The FSCA’s Financial Sector Outlook Study (2022) confirms that while 81% of adults hold bank accounts, 40% of low-income accounts remain dormant, and over 50% of credit-active consumers are over-indebted, reflecting a persistent mismatch between product access and effective financial engagement.

The commercial challenge—and opportunity—therefore lies in engineering scalable distribution and advisory infrastructure that integrates digital delivery with trust-based engagement, enabling inclusive participation without compromising profitability. For investors, this represents a frontier market dynamic: large addressable demand constrained not by capital scarcity, but by the absence of interoperable, impact-aligned systems capable of converting financial access into sustained financial wellbeing.

Alongside financial product providers, intermediaries and advisors, investors globally, such as private equity firms, have also identified the potential that this underserved market segment represents – a unique opportunity to meet a critical social need, in a financially sustainable manner.

What do PE firms look for when evaluating such solutions?

Nthabiseng Thema, Partner at Summit Private Equity, notes that a Southern Africa-focused private equity impact investor would typically apply the following filters when evaluating companies building solutions for this underserved market:

• Problem relevance: Is the venture solving a systemic issue - such as access to financial planning - not just a market inefficiency? Investors want the systemic issue addressed, not the product. Frame your business as a response to that issue.

• Scalability: Can the model grow without diluting its core value proposition? Is technology used to extend reach while maintaining quality? Technology should enable reach, but the model must deliver consistent value at every level.

• Execution discipline: Does the founding team combine lived experience with operational rigour? Are they solving from within the problem, not from above it? Scaling impact often requires navigating pricing, access, and margin tensions. Investors respect founders who manage these openly.

• Outcome orientation: Is success measured in tangible improvements - such as debt reduction, business formation, or asset ownership - rather than vanity metrics? Investors are increasingly rigorous. Be prepared to report on both financial performance and social outcomes. To show how solutions improve lives or livelihoods - not just how many users are acquired.

These criteria help distinguish ventures with real commercial and impact potential from those that simply market well.

A case in point: Lifecheq

In 2024, Summit Africa, through its Summit Private Equity Fund, invested R160 million of growth equity capital in Lifecheq, a fintech platform offering personalised financial planning, emerged from a simple but telling insight: most lower-to-middle-income South Africans are sold products, not solutions. The founding team - actuaries and former insurance executives - built a model that starts with the individual’s financial goals and works backward to design a financial roadmap.

Initially serving clients one-on-one, the business scaled by embedding its methodology into partner ecosystems, including insurers and advisory networks. Today, it enables thousands of ordinary individuals to make informed decisions about debt, savings, career moves, and family support.

The new capital is being used to support Lifecheq’s planned growth to emerging markets in the rest of Africa and Asia, where financial product providers, financial intermediaries and financial advisers are seeking solution-oriented approaches to client acquisition and retention. With this investment, Summit Private Equity joined a list of other shareholders in Lifecheq such as Naspers Foundry, Futuregrowth, African Rainbow Capital and VestedWorld (a US venture capital fund).

Conclusion

South Africa does not need more financial products — it needs financial architecture designed for dignity, resilience, and generational progress.

Lifecheq’s success illustrates what Summit Private Equity and other global investors are seeking: ventures that combine founder commitment, commercial viability, and structural relevance.

In a tough and uncertain investment environment, companies that tap into real, often overlooked demand, build strong trust with their customers, and attract talent and partnerships that traditional models often cannot are the ones that will help reshape the economy from the ground up.

¹ South African Reserve Bank (SARB), Financial Stability Review and financial sector balance sheet statistics.

ABOUT SUMMIT AFRICA

Summit Africa is an impact investment manager that focuses on making investments in key sectors of the economy, where there is persistent under-supply, in a manner that realises superior financial and social returns (transformation, job creation, and community upliftment) for institutional investors. To this end, since its inception, the Summit Private Equity Fund I (“SPEF I”) has invested in, built and expanded healthcare facilities in rural, peri-urban and township areas within South Africa. The Fund’s Education sector investments focus on delivering higher education and skills training to school leavers. Lastly, the Fund’s Financial Services investments focus on financial inclusion for individuals and Small Micro and Medium Enterprises.

In addition to targeting investments in the financial services, and ICT services sectors the Summit Private Equity Fund II (“SPEF II”) will include food security as an additional sector for South Africa and the Southern African region.

In the last edition of the African Investing for Impact Barometer by Riscura and UCT Business School, Summit was recognised as a Top Private Equity Manager in Sustainability Themed Investment and ESG Integration (out of 2,640 funds from 382 fund managers in Africa), and in 2023, Summit was awarded the Super Returns Africa Best ESG Fund of the Year award.

www.summitafrica.co.za

About Lifecheq

Lifecheq is a South African fintech company dedicated to democratizing access to high-quality financial advice through technology. Founded in 2015, Lifecheq empowers individuals and financial advisors with personalized, goal-driven planning tools that go beyond products to deliver real-life solutions.

Today, Lifecheq partners with leading financial institutions and supports over 8,000 advisors annually through its proprietary platform. Backed by investors including Naspers Foundry, Futuregrowth, African Rainbow Capital, and Summit Private Equity Fund, Lifecheq is on a mission to unlock economic mobility for millions across Africa and beyond. Learn more at www.lifecheq.co.za