If you had to score South Africa on its access to and usage of affordable financial services across 21 other emerging markets, where would you put it?
Brookings launched its 2015 Brookings Financial and Digital Inclusion Project (FDIP) Report yesterday, and South Africa managed to come in second overall, only being beaten by Kenya.
Darrell M West and Robin J Lewis analysed the financial inclusion landscape of 21 other countries, and each was scored and ranked based on 33 indicators spanning four dimensions: country commitment, mobile capacity, regulatory environment, and adoption.
In South Africa’s case, it earned 80 percent of the total possible points to garner the second-highest top overall score. It also placed first for mobile capacity, third place for adoption, and 12th place for country commitment.South Africa also tied for the highest score for formal account penetration, including among rural, low-income, and female groups.
“As of 2014, around 75 percent of adults had bank accounts and 5 percent used non-bank financial products. ATM/debit cards have become more common, with 34 percent of the banked population owning a South African Social Security MasterCard,” the report said.
It also noted that South Africa was unlike many other countries in the study, in which women are generally not disproportionately excluded from formal financial services.
“The 2014 Global Findex found that about 69 percent of men and 69 percent of women had accounts with a formal financial institution or mobile money provider.”
The report also noted that South Africa’s high mobile penetration rate helped to push it further in the banking sector.
“About 90 percent of adults in South Africa used a cellphone in 2014, and about 24 percent of the adult population used “cellphone banking” (mobile banking) that year. This reflects a slight increase in the number of users engaging in cellphone banking between 2012 and 2014, from 8.3 million to 8.6 million,” it said.
It did however, also state that the M-Pesa mobile money service has had a luke-warm launch in the country. M-Pesa is hugely popular in Kenya, but by May this year only 72 000 customers have signed up.[Image – CC Ken Teegardin]