2 April 2009
Since its inception in 2004, over six million South Africans have opened Mzansi bank accounts which provide previously un-banked clients easy access to banking services countrywide.
The service was established following a recommendation by the Financial Services Charter (FSC) and is supported by the country’s four largest banks and the Post Office.
“The number of accounts opened has surpassed six million since the launch of the Mzansi initiative,” said Deputy Finance Minister Nhlanhla Nene said in Pretoria on Tuesday.
“This vindicates our position that historically disadvantaged members of our population can be harnessed into a potentially viable market.”
Lack of access
Nene said that before the introduction of the FSC initiative, South Africa’s financial system did not provide financial services to disadvantaged people, and the financial inclusion presented by Mzansi accounts made a much needed contribution towards the economic development of the country.
Close to half of the South African adult population did not have access to a basic banking account, and he added that South Africans did not have a savings culture.
“We acknowledged that South Africa as a country does not have a savings culture,” he said. “Initiatives such as the Mzansi account therefore serve as a crucial building platform from which a culture of saving can be launched.”
Nene pointed out that this lack of access to financial services led to various informal means of transacting, which were not only inconvenient, but also posed many risks.
“This shows our recognition that financial development is a key ingredient for economic development,” he said. “A society with an undeveloped financial system is bound to experience a slower pace of growth in the real sectors of the economy.”
Banking for all
While the Mzansi account initially had a limited functionality, the account has since been enhanced to include stop order and debit order facilities, and Nene called for more innovative products and services to be provided to low-income earners.
Other countries that have put in place policy interventions to involve all citizens in banking include India, the United States and France where it is statutory for every adult to have a bank account. Zambia also embarked on a drive to effect cash transfers to beneficiaries of social security grants through mobile bank branches.