In the case of EMDEs like South Africa, these entities are less prominent and although we agree with the intent to bring unregulated or under-regulated activities into mainstream regulation, there could again be unintended consequences that require careful consideration during implementation.
In South Africa the definition of shadow banking as currently stated would cover credit-extending institutions that address the financial needs of individuals and SMEs who are not adequately integrated into the traditional banking sector. Some of these institutions play an important role in deepening our financial system and advancing financial inclusion.