Which is worse: bank account or no account?
Fees are a pain, but financial exclusion is a real problem
"The mattress doesn't charge for smallwithdrawals." These were the words of a 31-year-old woman named Sonta, who worked at Shoprite, when she explained to researchers from the Boston Consulting Group her aversion to banking services. On the surface, South Africa may appear to have a decent degree of financial inclusion - last year 77% of the population over the age of 15 had transactional bank accounts. But Sonta's sentiments illustrate the reality more accurately. She was one of 1500 locals interviewed by BCG to assess South Africa's level of financial inclusion in a report published earlier this year. Of those interviewed, 40% said that the fees charged by banks for transaction accounts were too expensive and that cash was easier to manage. Several pieces of research, including the FinScope survey by the FinMark Trust, which annually measures the number of banked South Africans, note low usage of bank accounts, with many withdrawing funds in one go soon after they come in. It is a...
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