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Johannesburg - While the number of South Africans using financial services has increased from 80% in 2014 to 84%, more people are struggling to stretch their money, the FinScope Consumer Survey South Africa has shown.
The FinScope Survey assesses access to financial services and identifies factors that inhibit financial service providers from reaching the financially under-served and unserved individuals. The 2015 survey results released on Tuesday are based on a sample of 5 000 adults.
The survey showed that approximately 28% of South Africans are struggling to make ends meet, compared with 24% in 2014. "Households are under financial pressure with many claiming to receive support from others and fewer are remitting," it said.
Commenting on the survey, TNS Research Surveys CEO Rob Powell said there is still significant reliance on other people for finance.
The survey showed that the level of financial inclusion has increased marginally from 86% in 2014 to 87%. Approximately 31.2% of adults have a bank and or other formal non-bank product and services.
Hoosain Karjieker, Mail & Guardian CEO, said financial exclusion is a real problem with some people resorting to loan sharks. "Those who set regulatory regime need to be encouraged to make bold decision to lift people from financial exclusion," Karjieker said. He cited the success of Kenya's Mpesa system.
He called on authorities to do more to fast-track financial inclusion. The recent student protests have shown that change comes quickest when forced upon those who have power, he said.
Powell, however said financial inclusion is not enough. "It is time to look at a new paradigm. How do people engage with financial services? The quality of that inclusion must make changes to their lives. If people see benefit in what we create, they will see benefit in engaging with us."
There isa large number of the so-called thinly served individuals who use banks for deposit and withdrawal. "Is that really our job? To create a mechanism where money is dropped and withdrawn, Powell asked.
Prega Ramsamy, FinMark Trust CEO, said it is key that those who have stepped out of poverty move up the ladder of prosperity and thus encouraged quality financial inclusion.
