SA banking culture is developing fast

News that South Africa’s banking population is soaring must be most welcomed by the sectors interested in the economic development of the country – for job creation and poverty eradication purposes.

Research conducted by FinMark Trust reveals that SA’s banked population has grown 8% over the past year alone, with 75%, or 27.4 million of the population, aged 16 and older, now banked.

In its National Development Plan (NDP), the South African Government had challenged the financial sector to achieve financial inclusion of 70% in the country by 2013, with a target of 90% set for 2030.

And in 2013, an additional 3.5 million people were ‘banked’ (they have products or services provided by a commercial bank regulated by the SA Reserve Bank) which reflects an increase from 67% in 2012.

The FinMark Trust FinScope South Africa 2013 consumer survey showed that the increase is driven by two factors: the roll-out of the Sassa (South African Social Security Agency) system and organic banking growth.

Essentially, the roll-out of the Sassa card contributed 1.9 million people to the banked population in 2013.

In addition, the study further revealed that 65% of banked adults surveyed said that they prefer using bank cards instead of cash to make their purchases.

“It is clear that electronic payments are being embraced by millions of South Africans who are now realising the benefits of a cashless society,” said Dr Prega Ramsamy, CEO of FinMark Trust.

“It is our goal to continue to grow financial inclusion both in South Africa and abroad by introducing innovative payment solutions that will help make transacting quicker, safer and more convenient for everyone, everywhere and whenever needed.”

According to FinScope South Africa 2013, about 14.2 million adults in South Africa were credit active in 2013 – more than a third of them (about five million) show one or more signs of over-indebtedness, with some of the symptoms being  applied for their debt to be rescheduled; have been garnisheed; considered to see someone to help with their debt problems; considered to cancel their policies to pay back their debt; and/or; have problems with making ends-meet and are in arrears with payments.

More than half of adults in SA (58%) have claimed they are currently not saving. The survey noted that 14.2 million people have some form of credit or loan. In 2012, it was 13.1 million.

Borrowing and credit from banks has increased from 4.5 million people to 6.5 million people.

In 2012, 4.2 million people borrowed money from friends and family. In 2013, 3.1 million people did so.

Internet banking in SA has increased to 11% in 2013, from 7% in 2012. However, 71% still do not use mobile phone banking. This form of banking has increased to 28%, from 25% in 2012.

Although majority of South Africans use cellphones – 33 million – the proportion of people using cellphone banking has only increased from 8.9 million in 2012 to 10.3 million in 2013.

A further 42% of adults say that they are interested in using cellphone banking.

Of those who use cell phone banking 84% – buy airtime,  54% – check bank balances, 15% – pay bills,  12% – Remit (send and receive) money by cell phone.

The report found that a third of adults in SA find technology too complicated to use for financial activities skewed towards females.

Meanwhile, the Payments Association of South Africa recently noted that South African banks have been swindled out of millions of dollars this year by an international fraud syndicate that stole card details from restaurant chains,

Card fraud has been on the rise in Africa’s biggest economy over the last two years despite efforts to replace magnetic stripe cards with the more secure chip variation, PASA further noted.

“The latest scheme, which was devised through a variant of the software virus known as Dexter, most likely originated in Europe.”

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