Paper short abstract:

This paper explores how in South Africa democratisation and political legitimacy led to the marketing of financial products to the predominantly African poor. It shows why legitimacy was more important to marketing than making profit.

Paper long abstract:

For the insurance industry, South Africa is somewhat of a testing ground for new financial products for the poor. For the past 20 years, insurance companies have developed insurance products and related services that were specifically designed for the predominantly African poor. Based on interviews with actuaries and others involved in the insurance industry, as well as an online survey among actuaries, I argue that profit was not nearly as relevant for these initiatives, and that these initiatives should also not be taken primarily as an expression of global neoliberalism. Instead, these attempts had to fortify the legitimacy of the financial sector that due to racial inequalities in South Africa and democratisation in 1994 was far from self-evident. By exploring the legitimacy of financialization this paper sets out to reconceptualise the dynamics of market and state that are so central to contemporary understandings of global finance.