South African companies are missing out on the “grey money” which exists in the informal sectors of the economy. Historically, there have been few mechanisms to service people earning cash income, but the size of the so-called “grey money” sector may be larger than many imagine.

In fact, Lebo Motshegoa, the managing director of Foshizi, a research company specialising in mass market research, believes that about 30 to 40 percent of retail spending is unbanked.

Motshegoa says by not catering to the needs of those who earn and spend cash, businesses might be missing out on the consumer spend of millions of people. He is talking about people who run shebeens, spazas, takeaways and informal car washes or who trade as hawkers.

The list also includes domestic workers, gardeners, nannies, taxi drivers and hairdressers, who are often paid in cash.

According to Rod Salmon, a consumer and retail analyst at Barclays, “grey money” is a feature in all developing economies, especially as more people move from the rural areas to urban sectors in search of better employment.

Despite the sprouting of formal shopping centres in many townships and semi-rural towns, there are still a lot of hard cash activities going around.

He said that while Barclays, for example, recognised the existence of “grey money”, there was little that could be done without involvement from the consumer.

One of the efforts of the bank had been to introduce low-cost banking so that more people could participate in the system in some way, Salmon said.

However, many banks have tried. Standard Bank even introduced an access point system where consumers could access their money from spaza shops, salons and other marketplaces.

Take, for an example, the taxi industry, which will take years to formalise when it comes to a formal payment system. Hard cash rules this industry, which is estimated to have an annual turnover of R16.5 billion.


The Vodacom “Please Call Me” case should be a lesson to corporates and employees.

In a country where entrepreneurship and innovation have been placed at the centre of the economic growth agenda, there have to be mechanisms put in place to help nurture people when they come up with bright ideas.

It is believed that Vodacom made hundreds of millions of rands on the “Please Call Me” service. The service also comes with adverts every time someone uses it and the real money lies in the return call.

The way in which the situation was handled leaves a lot to be desired. The former chief executive of Vodacom, Alan Knott-Craig, took all the credit for the idea of the “Please Call Me” service.

To make matters worse, when Nkosana Makate sought to be compensated, he was labelled as “greedy” and told he “should get nothing”.

Knott-Craig is the real greedy one here for “manipulating the truth” and taking all the credit for himself.

One wonders if there was an incentive or performance bonus received by Knott-Craig from shareholders. Leaders like Knott-Craig are why so many people in the workplace suffer from stress.

Leaders who refuse to reward excellence or who fail to comprehend that a black guy in the finance department can come up with an idea that will revolutionise an industry are the reason why some people hate waking up in the morning to go to work.

Here is a guy who saw a gap, who probably represents the disadvantaged customer base, and his moment to shine was usurped by a boss who earned millions and has never even needed to use the service.

The lesson for Vodacom: help nurture your employees’ ideas so that they can become better people… not bitter people.

Edited by Peter DeIonno. With contributions from Nompumelelo Magwaza and Ayanda Mdluli