South Africans feel worse off this year, with more people claiming to have gone without cash income or medical treatment than last year.
These are the latest results from the 2005 FinScope Survey, conducted by FinMark Trust, which tracks perceptual changes in the South African environment, especially in relation to financial services.
Forty-five percent of respondents said they had often or sometimes gone without cash income; 33% had gone without medical treatment; and 29% had gone without electricity in the home.
All of these percentages were higher than last year’s. But there was a marginal decrease in the number of people who had sometimes gone without food, down from 28% last year to 27%.
These numbers are particularly striking against the backdrop of strong economic growth and a consumer boom. The survey is based on people’s perceptions and, although the economy is booming, indicates that many are not feeling any direct benefit, particularly rural black people in the lower-income bracket.
According to Mike Schussler, econo-mist at T-Sec, the economic boom is restricted to urban areas. “We see massive growth in towns like Rustenburg and Nelspruit, but this is passing small rural villages by.”
Schussler points to the tremendous increase in the number of people flying out of Johannesburg International. This paints a positive economic picture, but does not take into account the fact that fewer people are driving to holiday destinations, so small towns along holiday routes are losing out on tourism.
Poverty is also affecting the drive to get people banked. Many people say they cannot open bank accounts because they do not have jobs or regular income.
Although the number of people who claim to have access to a bank is up from 21% to 28%, after adjusting for population growth, the number of banked has increased by only 1% .
Even low-cost banking initiative Mzansi has not had the anticipated degree of impact. Despite 1,3-million accounts opened by the time of the survey, only 2% (551 000) of the adult population claimed to have an Mzansi account, while 193 000 said this was their first bank account.
“How you feel is a very important determinant to your propensity to buy financial products,” said Mark Napier of FinMark Trust.
If people do not feel that their financial situation is improving, they are unlikely to buy traditional financial products.
The survey also shows that people’s negative feelings towards banks could influence their tendency to use them. Sixty-one percent of respondents were concerned about paying service fees; 53% complained about long queues; and 51% about not being treated with respect.
Lower income earners, Napier said, tended to believe that banking was something they couldn’t afford. But, he added, access to banking should remain a strategic goal until such time as conditions improve and attitudes shift.
There was also a tendency to monitor the number of banked rather than finding other ways for people to save, he said.
“Thirty-eight percent of the lower- income earners have store cards and one-fifth would like to see retailers offering savings accounts, education products and funeral benefits.”
He also pointed out that 3,6-million of the banked population (25%) draw their full income at once and leave no balance. The same percentage of people said they could live without a bank account.
One reason for this is that 45% of South Africans do not have any money left after paying their bills.
But for those who do save, 81% of their savings are done outside of a bank savings account. Less than half the respondents see banks as ideal financial service providers, which gives retailers a chance to offer innovative new financial products once the Dedicated Banks Act is promulgated. The law will allow retailers to act as banks within set limits.