Assessing banking services for women working in the informal economy : the case of the Mzansi account.
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Date
2008
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Abstract
Rutherford's research demonstrates that "the poor can save, do save, and want to save money" (Rutherford, 1999: 7). Furthermore, if given a formal bank account this correlates with the poor being more likely to save (Porteous and Hazelhurst, 2004: 63). But in 2004, the unbanked made up 54.5% of the South African adult population (FinScope, 2006: 18). In the same year, to draw more people into the realm of the banked the Mzansi account was launched. The account is a first order transactional product and a saving service which targets poor clients from LSM 1-5. Mzansi account holders are found to be significantly more likely to be informally employed or unemployed (Porteous, 2007: 10). Yet there is a research gap about the financial behaviour of those working informally. This study draws on the experiences of women working in the informal economy who utilise the Mzansi account. It aims to determine the limitations and benefits of the account. It also seeks to learn what role the Mzansi account plays in the savings habits of the women and how it influences their livelihood strategies. This is with a view to recommending how the services of the Mzansi account can be improved so as to maximise its support of informal workers. The research suggests that the intrinsic benefits of the Mzansi account are that the account's bank charges are lower compared to other bank accounts, a small initial deposit is needed to open the Mzansi account and a proper address is not required to open the account. The interviewees highlight five day-to-day limitations on the Mzansi account. First, interviewees identify the lack of a bank book to view the transactional activities occurring in the account as a problem. Second, the cap on the account where a maximum of Rl5 000 is only permitted hinders the potential to save money in the account and receIve insurance pay outs. Third, the cost and frequency of bank charges are still expensive. Fourth, the distance to access banks or ATMs for the women in semi-rural areas makes it difficult and costly for them to access their bank account. Lastly the issue of crime is a problem when utilising ATMs. Savings from the Mzansi account influence livelihood outcomes by enabling investment in funeral insurance through debit orders. This investment helps mitigate future vulnerability. In terms of livelihoods and the women's businesses, the savings from the Mzansi account are used for the purchasing of stock. This may not improve livelihood outcomes by generating further income but it maintains the women's business stability.
money" (Rutherford, 1999: 7). Furthermore, if given a formal bank account this
correlates with the poor being more likely to save (Porteous and Hazelhurst, 2004: 63).
But in 2004, the unbanked made up 54.5% of the South African adult population
(FinScope, 2006: 18). In the same year, to draw more people into the realm of the banked
the Mzansi account was launched. The account is a first order transactional product and a
saving service which targets poor clients from LSM 1-5.
Mzansi account holders are found to be significantly more likely to be informally
employed or unemployed (Porteous, 2007: 10). Yet there is a research gap about the
financial behaviour of those working informally. This study draws on the experiences of
women working in the informal economy who utilise the Mzansi account. It aims to
determine the limitations and benefits of the account. It also seeks to learn what role the
Mzansi account plays in the savings habits of the women and how it influences their
livelihood strategies. This is with a view to recommending how the services of the
Mzansi account can be improved so as to maximise its support of informal workers.
The research suggests that the intrinsic benefits of the Mzansi account are that the
account's bank charges are lower compared to other bank accounts, a small initial deposit
is needed to open the Mzansi account and a proper address is not required to open the
account.
The interviewees highlight five day-to-day limitations on the Mzansi account. First,
interviewees identify the lack of a bank book to view the transactional activities
occurring in the account as a problem. Second, the cap on the account where a maximum
of Rl5 000 is only permitted hinders the potential to save money in the account and
receIve insurance pay outs. Third, the cost and frequency of bank charges are still
expensive. Fourth, the distance to access banks or ATMs for the women in semi-rural
areas makes it difficult and costly for them to access their bank account. Lastly the issue
of crime is a problem when utilising ATMs. Savings from the Mzansi account influence livelihood outcomes by enabling investment
in funeral insurance through debit orders. This investment helps mitigate future
vulnerability. In terms of livelihoods and the women's businesses, the savings from the
Mzansi account are used for the purchasing of stock. This may not improve livelihood
outcomes by generating further income but it maintains the women's business stability.
Description
Thesis (M.A.)-University of KwaZulu-Natal, Durban, 2008.
Keywords
Women, Black--South Africa--Economic conditions., Informal sector (Economics)--South Africa., Theses--Development studies.