Affordable banking in the form of the Mzansi national account — an initiative by the country’s major banks to reach the country’s estimated 13-million unbanked — became a reality on Monday.
Developed in response to the Financial Sector Charter objective to provide people in the LSM one to five category with affordable and accessible banking, the Mzansi account will be priced significantly lower than current banking offerings and will promote savings and make transacting easier in a country notorious for high bank charges.
The account will be offered by South Africa’s so-called “big four” banks — Absa, Nedbank, First National Bank and Standard Bank.
Absa was quick off the mark on Monday to let it be known that it will not be charging Mzansi customers any of the fees normally associated with opening a new account.
“Based on a genuine desire to facilitate access to banking for the lower-income market, Absa will not charge any of the fees normally associated with opening a new bank account for Mzansi customers.
“In addition, the bank has also waived the minimum deposits and balances that usually form part of the requirements of maintaining a bank account. Absa’s research has shown that in this market, minimum balances and opening-fee requirements are major inhibitors to accessing banking.
“These concessions will create a gateway for banking the unbanked through the most extensive delivery and distribution network in the country,” Absa said.
Moreover, Absa Mzansi account holders will have access to a telephone enquiry service for balances and information regarding nearest Absa service points, the bank said, describing it as a first for this market and unique to the industry.
“Absa has strategically positioned itself over the past year to be at the forefront of this ground-breaking initiative and Absa is enthusiastic and committed to today’s launch.
“We regard the new landscape as an opportunity to differentiate our Mzansi offering and provide real value to potential customers to the group,” said Jenny Tyobeka, managing executive: Absa Group flexi banking services.
“Absa will continue to expand its outlet and ATM [automatic teller machine] coverage, cost-effectively, into targeted areas as well as deploy alternative delivery capabilities to improve its reach into the target market.
“We will further leverage AllPay’s [Absa’s social grant distribution partner] mobile capabilities to deliver to this important market niche,” added Tyobeka.
Absa is also investigating the potential opportunities that could arise from its alliances with Telkom and Vodacom to better service the unbanked market.
Fierce competition
Nedbank Mzansi account spokesperson Colin Donian said competition among the banks for Mzansi clients will be fierce.
“More than 13-million adults are currently unbanked, and with the large-scale sharing of infrastructure among participating banks and the PostBank, we are now able to offer the Mzansi account across the length and breadth of the country, and at highly reduced rates, relative to existing products,” Donian said.
“Although banks across the industry have teamed up, from an infrastructure point of view, to launch the Mzansi account — and this includes a joint advertising campaign — the Mzansi account is branded, priced and product-designed to the specifications of each of the participating banks, therefore providing clients with a choice,” he added.
“Competition among the banks for Mzansi clients is going to be fierce, which is to the benefit of Mzansi clients,” said Donian. “Nedbank aims to add to the functionality of the Mzansi account in due course and by mid-2005 we shall further differentiate our product.
“We’re excited to explore new markets, and look forward to building lasting relationships with new clients. We’re also committed to further understanding their needs and remain flexible to responding to these as they evolve.
“Our branches are geared to receive our new clients. We remain focused on acquiring new clients and ensuring their banking needs are taken care of appropriately.
“The Mzansi account offers more than just a banking account for individuals. Financial literacy is an important element to this endeavour, and is an area where as responsible bankers, we aim to play a meaningful role.
“We anticipate that the Mzansi account, because of its affordability, accessibility and simplicity, will provide an incentive to save. Over time, account holders that use the account for savings and transactional purposes will establish a credit history.
“This potentially establishes the prospect for the extension of credit to Mzansi account clients. If credit is used for the purposes of funding small businesses and entrepreneurs, there are substantial economic benefits.
“The Mzansi account is an important step in the banking history of our country. As a bank, we’re pleased to be an integral part of this initiative, as a first step in making financial services more accessible to all South Africans,” Donian added. — I-Net Bridge
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