RSS Feeds RSS | Views on ITInews | contact | terms of use | privacy 

Editorial Categories:


Forthcoming Events:

No Upcoming Events

Save by getting insurance quotes

Proudly South AfricanInforming Consumers and Financial Advisors since 1988 | Click Here to Advertise
Car, household, life and business insurance quotes

News Article : What changed in people’s lives according to FinScope since 2004?
Category: Financial Services : Research
Author:Edited by ITInews
Email:[email protected]
Posted:04 Nov 2014

 Email this article Comment on this Article  Print this article

A ten year perspective on financial inclusion in South Africa

FinMark Trust released the results of its FinScope Consumer South Africa 2014 survey results today.

The FinScope Survey, developed by FinMark Trust, is a research tool to assess financial access in a country and to identify the constraints that prevent financial service providers from reaching the financially under- and unserved people.

The FinScope Survey is a nationally representative survey of how individuals source their incomes and how they manage their financial lives. It also provides insight into attitudes and perceptions regarding financial products and services.

FinScope South Africa involved a range of stakeholders engaging in a comprehensive consultation process, thereby enriching the survey. To date, FinScope Consumer Surveys have been conducted in 19 countries. 

The study was based on a nationally representative sample of 3 900 adults who are 16 years or older.

Highlights from the survey

Overview of changes in the past ten years

The survey results show an increase in access to infrastructure in 2014 with more adults having access to electricity (82% in 2004 to 94% in 2014), tap water on property (increased from 67% in 2004 to 81% in 2014) and flush toilets (increased from 55% in 2004 to 64% in 2014). 

An improvement in the standard of living is indicated by the decrease in LSM 1-5 by 4.4 million since 2004 while LSM 6-10 increased by 12.2 million people since 2004.

Working and unemployment status of individuals has not changed much over the past ten years with 9 million people (22%) unemployed in 2004, and 9.5 million (23%) still unemployed in 2014.

The usage of cellphones has increased to 33 million up from 12 million in 2004.

Although there is an increase in the salaried adult population in 2014 (7.2 million in 2004 to 12.4 million in 2014), there is also an increase in dependence on government grants (19% in 2004 to 30% in 2014).

78% of the adult population earned an average personal monthly income of less than R2 000 per month in 2014. However the number of adults with no personal income decreased from 4.1 million in 2013 to 2.7 million in 2014.

Increase in financial inclusion

This year’s survey results indicate an increase in the number of financially included adults from 17.7 million in 2004 to 31.4 million in 2014. Banking increased from 46% in 2004 to 75% in 2014.

The overall increase in financial inclusion from 61% to 86% over the past ten years is mainly driven by an increase in banking with more people accessing banking products driven by organic banking growth and SASSA roll out. 

Although an increase in banking is noted in 2014, the survey shows that the rate of growth in banking has dropped as indicated by bank account product usage remaining static at 75% for both 2013 and 2014.


One of the determinants of deepening financial inclusion is the ability of South Africans to use transactional accounts to purchase/make payments for goods and services and electronic fund transfers.

The study shows that 27.2 million adults have transactional products, and only 12.9 million adults use EFT or bank card payments at least once a week or monthly. Almost 100% of the banked population have transactional products.


The study reveals that 7.3 million (20%) adult South Africans have savings products with formal financial institutions in 2014.

Whilst the majority of those who are saving possess long-term savings products, it is a concern to note that only 44% of the salaried individuals have long-term savings or retirement products.

The contribution towards pension funds has decreased since 2013 from 4.8 million (13%) to 3.9 million (11%) in 2014.

This could be the effects from the perception or “talk” that the government will nationalise pension funds and other uncertainty surrounding Government Employees Pension Fund (GEPF).

Credit and borrowing 

According to the survey, 13.7 million people have formal credit products in 2014 compared to 13.9 million people with formal credit products in 2013.

While secured loans are on the increase, the increase in unsecured loans, at 40%, are mainly used for developmental purposes such as child education, building/extending homes and investing in business.

Use of personal loans from a bank is on the increase with 1.6 million people in 2014 compared to 1.2 million in 2013. 

The study shows that 2.7 million people have a credit card in 2014, a drop from 3.1 million in 2013. 

36% of adults have formal credit facilities from non-bank financial institutions which could be in the form of store cards, hire purchase (HP) credit, cellphone contracts and outstanding balance for a service offered. 

The survey indicates that borrowing from family and friends is on the increase at 3.7 million in 2014 up from 1.8 million in 2013.

Of the 56% of the adult population who do not borrow, 32% cited not having a job as a reason for not borrowing, while 31% did not want debt and 20% claim that they cannot afford to borrow.

The study reveals that 4.9 million people are showing signs of over-indebtedness, an increase from 4.7 million in 2013.

1.9 million people have applied to have their debt rescheduled and 1.4 million have had a garnishee or emolument order, while 2.2 million people have considered cancelling insurance and investment policies in order to pay back borrowed money.

Insurance – are South Africans over-insured with funeral cover?

While some growth has taken place in the insurance sector with 60% of adults having insurance, a significant increase has occurred with burial society membership at 32% in 2014 up from 20% in 2004, and formal funeral cover doubling at 33% in 2014 up from 15% in 2004.

The increase in burial society membership is also evident from 25% in 2013 to 32% in 2014. 40% of adult South Africans do not have any kind of financial product covering risk with lack of affordability cited as the main barrier to uptake.

The results show a decrease in formal insurance uptake from 7.8 million in 2013 down to 7.1 million in 2014.

Increase incidence of remitting through supermarkets

The incidence of remittance within South Africa increased from 20% in 2013 to 23% in 2014.

According to the survey, 85% of remittances are conducted monthly with an increase by 22% in remitting through a supermarket (an increase from 1.8 million in 2013 to 2.2 million in 2014),  while remitting through cellphones has increased by 15% (up from 1.3 million in 2013 to 1.5 million in 2014).

Remitting by banks only increased by 4.2% in 2014 (an increase from 2.4 million in 2013 to 2.5 million in 2014).

Mobile money – Do South Africans find technology complicated?

There has been a substantial increase in the usage of cellphones since 2004, with 33 million adults using cellphones in 2014 up from 12 million in 2004.

However, despite the increase in usage of cellphones at 90% in 2014, only 24% of the adult population use cellphone banking.

Cellphone banking only increased from 8.3 million in 2012 to 8.6 million in 2014. Over one third of adults in South Africa find technology complicated to use for financial activities according to the study.

Are consumers beginning to understand their rights and responsibilities?

Consumer protection and financial education are fundamental to the financial inclusion agenda of South Africa. 

An environment of poor financial literacy, coupled with a lack of adequate consumer protection, is likely to encourage consumer abuse and inappropriate use of financial services.

Users of financial services can easily be victims of unfair treatment by service providers, which is sometimes caused by opaque disclosure or nondisclosure of costs or conditions.

However, FinScope 2014 reveals that about 4 million banked adults have switched banks in the past 12 months prior to the survey.

Reasons for switching banks could be related to 55% of the adult population claiming to understand the benefits of banking products.


Overall there are 10 million unbanked people in South Africa. 

The survey showed that while savings is difficult due to low levels of income, most people prefer to save at home possibly due to high banking fees and a lack of confidence in the financial services sector.

Although unsecured loans are on the increase, 40% of these are being used for developmental reasons. Funeral cover seems to be the most popular insurance taken by most South Africans.

The number of excluded people has dropped to 5.3 million in 2014 from 5.7 million in 2013. 48% of those that are excluded reside mainly rural traditional areas.

The challenge for financial institutions is to bring appropriate affordable services to those who are not banked. 

There are no comments at this stage. Be the first to comment!
Please Login To Comment On an Article - Click here To Login

ITInews invites comments at the foot of each of its articles in which readers can respond freely - anonymously if they wish - to various topical issues and industry debates. However, comments submitted by readers that are defamatory or deemed, by the editors, to be racist or obscene will be deleted from the database. Furthermore, ITInews's editor would like to caution potential posters on its websites that while it welcomes robust debate, it will not hesitate to make the IP addresses of the authors of such defamatory statements available to the authorities, in the event of a court order compelling them to do so.

Get car, home, life and business insurance quotes in 3 easy steps

Join us today

Insurance Quotes

Car Insurance Quotes
Household Insurance Quotes
Business Insurance Quotes
Funeral Insurance Quotes
Life Insurance Quotes

Read the InsuranceQuotes Blog

Financial Services

More in Financial Services
Sorry, no other news...

Available Recruitment:
No Vacancies Listed...

ITM Website Design Cape Town
Copyright © 2005 - 2015 ITInews Online Publications (Pty) Ltd. All rights reserved Insurance Times & Investments Online and ITInews. ..::ISSN 1995-1256::.. No part of the materials including graphics or logos, available in this Web site may be copied, photocopied, reproduced, translated or reduced to any electronic medium or machine-readable form, in whole or in part, without specific permission from ITInews Online Publications (Pty) Ltd. Distribution for commercial purposes is prohibited.