As the class of 2024 completes their finals, the road ahead remains uncertain for many of them, especially those who find themselves in the ‘missing middle’. Defined as individuals whose incomes are “too high” to qualify for government financial assistance but “too low” to afford private education funding options, this group includes over 1.3 million public servants and their dependents.
“Many of us don’t realise that most our public servants in South Africa fall into the ‘missing middle’,” says Mala Suriah, CEO of Fundi. “Their reality is that despite being the backbone of critical services in our country, they will not be able to access traditional education loans for themselves or their children because of systemic gaps in the financial sector.”
Public servants such as teachers, nurses and police officers often bear the brunt of this exclusion, despite their critical contribution to communities. “This creates a cycle of indebtedness for many families,” explains Suriah. “Without access to affordable education financing, many public servants won’t be able to upskill or advance their qualifications, especially given recent budget cuts across key government departments. This limits their ability to meet the increasing demands of their roles and also perpetuates the negative perceptions often associated with the sector.”
The consequences of financial exclusion are far-reaching. “Public servants who can’t access affordable funding often resort to high-interest, short-term loans, which leave them overburdened with debt. This has significant consequences for these individuals. The stress and worry usually impacts their performance and delivery, and some find themselves increasingly tempted to take bribes often out of desperation simply because they cannot make ends meet.[1] As such, we find ourselves in a situation where many of the people helping us each day are financially stretched and stressed, with very little recourse available to them.”
She adds that this reality is contributing to the widening gap between the services public servants provide and the expectations placed on them: “The result is a public sector unable to keep pace with the demands of our growing and dynamic society.”
What many don’t realise however, is that public servants are at the heart of Fundi’s own mission. Mandated to serve the “missing middle” over 30 years ago, the organisation has invested over R9.4 bn in their development to date by enabling over one million loans for them and their families. “These figures are compelling,” notes Suriah. “They speak to individuals’ commitment to self-growth and progress, and demonstrate the sector’s resilience.”
This alone is not enough, however. “New partnerships are needed to rethink pervasive and potentially outdated financial definitions that exclude millions from education finance. We are hopeful that 2025 will bring the collective education sector resolve needed to champion new affordable solutions for the ‘missing middle’. This includes around policy – and what we as Fundi for example, are mandated to support in this space.
“If we want to experience the type of service, solutions-driven thinking and innovation we expect from public servants, we need to see talk become action in the New Year and for a new breed of resolute ‘missing middle champions’ to emerge. This is the only way positive change will be seen on the ground. As Fundi, we stand ready to support this,” she concludes.
[1] https://www.iol.co.za/ios/news/public-servants-debt-spiral-0054e0a5-e6a7-4fc3-9838-acebf13496d8