The low-income national banking account Mzansi exceeded one million accounts by May 15, Colin Donian, the Banking Council director responsible for the Mzansi initiative, said on Wednesday.
Launched less than seven months ago, the Mzansi account is a first-order banking account that provides account-holders with entry-level banking services.
The account’s structure is designed to ensure access and affordability to entry-level clients and the Mzansi account is a central element of the banks’ commitment to fulfil a core objective of the Financial Sector Charter — to provide access to the financial system for all South Africans.
The Mzansi account was launched on October 25 last year and reached the 100 000 mark in less than a month. It exceeded 250 000 by December 13 and 500 000 in early February.
The initiative was the result two years of work between the banking institutions, the Banking Council and Nedlac in response to requirements outlined in the Financial Sector Charter.
The Mzansi account is facilitated through the four largest commercial banks — Absa, First National Bank, Nedbank and Standard Bank — and the government-owned Postbank.
To date, 91,3% of the Mzansi account-holders are new to the institution at which they have opened their account. This is a persuasive indicator that the account is achieving its aim of providing affordable and accessible banking to the previously unbanked population, which is consistent with charter objectives.
The majority of account holders (62%) are between 25 and 54 years old, 28,9% are between 16 and 24, 6,9% are above 55 and 2,1% are below 16 years old.
The racial breakdown shows that account holders are reflective of the country’s population demographics and consistent with the banked/unbanked population profiles.
The largest take-up comes from black communities, which has the largest unbanked population.
Unsurprisingly, residents of Gauteng and KwaZulu-Natal hold the largest number of accounts, with almost 30% and 17,5% respectively.
An average of R325 is currently being held in each Mzansi account, amounting to a total balance of R325-million.
In terms of usage patterns, Mzansi account-holders behave in a similar manner to existing entry-level clients. In the past 30 days, 82,8% of the accounts have been used, with 95% of the accounts having a positive balance.
South Africa, compared with other developing countries, is on the right track in banking its bankable population. In the past seven months, an additional 4% of the South African population has been banked via the Mzansi account, placing the country at the same level as Argentina and a step away from Malaysia.
As Mzansi accounts are being added at the rate of about 9 000 per working day, more than R1-million is being added to national savings every four working days.
Eventually, the deposit and withdrawal history generated by Mzansi account-holders will allow them to access credit, generating a new entrepreneur or consumer.
“While we understand that even the significant achievement of one million account-holders is just a start in the grand scheme of charter objectives, it is extremely encouraging to see that the rate of take-up is so strong and that the appropriate target market is largely being reached,” Donian said. — I-Net Bridge