Crossing the digital divide: Creating real value for informal economies

South Africa’s informal economy is a R1 trillion engine of survival, ingenuity and resilience[1]. It represents 19.5% of total employment across 1.9 million businesses and it is built by people of all ages, nationalities and genders[2]. In townships and peri-urban areas, where more than half the country’s population lives, informal traders are increasingly becoming the most visible and vital players in local economies. They support the economy, build communities, and sustain homes.

And yet, they also remain largely excluded from the digital realm. Marketing and general awareness remain a challenge with nearly 35% of informal sector companies needing more support[3]. Digital marketing and access to digital services that give them presence and make it easier for customers to find them are key to supporting the sector’s growth and expansion.

This is the inclusion gap, where informal enterprise meets invisible infrastructure, and it is one that needs to be crossed for everyone’s benefit. If informal traders can make their brick-and-mortar stores discoverable in the digital world, the impact would be transformative. This gap between digital potential and practical access is exactly where scalable impact lies. When informal retailers are digitally onboarded, they gain convenience and access to their own reservoir of transaction histories. With access to the right support and platforms, they can benefit from the opportunity create their own digital microsystems built and build customer loyalty and even reward programmes.

Flood helps informal traders gain this visibility in the simplest way possible. The white-label platform operating on the SuperApp-as-a-Service model embeds digital commerce, payments, loyalty and rewards directly into the applications of trusted companies such as banks and telcos. Working through these trusted platforms that users already know, Flood puts informal traders into the spotlight, making it easier for them to attract customers, helping them to be found on a digital platform offered by a large audience player that offers access to an engaged audience. The goal is to take away the need for informal traders to download a new app or invest in expensive hardware so they can benefit from digital marketing. Instead, they use an existing ecosystem to create a digital presence which alerts nearby customers to their location, special offers and products.

The truth is that real inclusion must go beyond just software. It needs for companies working together to provide the informal market with tools that are easy to use and accessible within their existing constraints.

As collaboration deepens, there is a clear path forward for telcos to become digital enablers, banks SME catalysts and regulators innovation partners. These changing priorities align with the themes of the 2025 SME Finance Forum, the official G20 side event focused on financial inclusion, digital innovation and sustainable SME growth. The goal of this event is, across multiple partners and policymakers, to reframe how the ecosystem thinks about inclusion. It is more than just a social objective; it is a smart and scalable economic strategy that can change the shape of the country.

This event, and the conversations that spark up around it, should also focus on how inclusion is more than bringing people into a system. It isn’t as simple as giving people access to banking or digital tools. Real inclusion means meeting people where they actually are and then making the system work better for them in ways that make sense. Otherwise, inclusion becomes more hills for informal traders to climb.

Crossing the divide should be about designing systems flexible enough to recognise the value of the informal economy by making it digitally discoverable and adapting to its rhythms, supporting the sector’s growth on its own terms. If inclusion is to be meaningful, not just measurable, it must be shared and built around people. The conversations at SMEFF are an invaluable start, but action requires alignment and proximity so that the solutions for the informal economy recognise all its contributors.

For more information on Flood, visit www.flood.finance