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Assessing banking services for women working in the informal economy : the case of the Mzansi account.

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. / Thesis (M.A.)-University of KwaZulu-Natal, Durban, 2008.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:ukzn/oai:http://researchspace.ukzn.ac.za:10413/423
Date January 2008
CreatorsPeer, Nazish.
ContributorsSkinner, Caroline.
Source SetsSouth African National ETD Portal
LanguageEnglish
Detected LanguageEnglish
TypeThesis

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