Mzansi: SA banking spreads its net
23 February 2005
South Africa's new low-cost national bank account, "Mzansi", launched on 25 October 2004, extending banking to low-income earners and those living beyond the reach of banking services - and is already proving to be a hit.
According to the Banking Council of South Africa, over 500 000 Mzansi accounts had been opened by February, with early evidence from the country's banks suggesting that the great majority of new accounts were opened by people who had never banked before.
"It is extremely encouraging to see that our target market is largely being reached", said the council's Colin Donian. "More particularly, we are thrilled to see that the uptake among women has been so high - 56% of Mzansi account holders are female."
So far, the majority of Mzansi account holders (62.5%) are between 25 and 54 years old, 27.1% are between 16 and 24, 8.3% are 55 and above and 2.1% are below 16 years.
Statistics also show that the majority of
account holders are black (90.1%), with whites at 4%, coloureds at 3.8% and Asians at 2.1%.
According to the Banking Council, an average of R290 is currently being held in each account, amounting to a total balance of R160-million brought into the formal banking sector.
The country's four major retail banks - Absa, FNB, Nedcor and Standard Bank - as well as Postbank offer the Mzansi account.
Banking branches out
Along with "container branches" and mini-ATMs in townships and rural areas, Mzansi is an initiative by the country's banks to put full-service banking within at most 15 kilometres of all South Africans, and an automatic teller machine (ATM) within at most 10 kilometres of their homes.
This is in line with the financial sector's black economic empowerment charter, which set a the target of providing affordable first-order banking services within a 20km radius of 80% of the population
According to the Banking
Council's co-ordinator for access initiatives, Charles Chemel, about 13 million South Africans were "unbanked" at the time of Mzansi's launch.
Mzansi is a basic, standardised, debit card-based transactional and savings account. All that is required to open the account is a valid ID document. To keep costs as low as possible and to ensure that the account is easy to use, transactions are limited to deposits, withdrawals and debit card payments - the account includes a debit card that can be used at retail outlets.
No management fees
No management fees are charged on Mzansi accounts, and one free cash deposit per month is allowed. Mzansi customers are thus able to save without having their capital eroded by bank charges, with the only charge being for transactions made - and with ATM transactions costing the same regardless of which bank's ATM is used.
Each bank establishes its own branch transaction fees, as well as initial deposit
requirements - Nedbank, for example, requires a minimum R20 deposit to open an account, while Absa requires no initial deposit.
The early take-up of the account, according to Business Day, suggests that concerns about Mzansi's limited functionality - it does not, for example, allow for debit orders on accounts - were misplaced.
"For now, we are satisfied that most basic requirements for these customers are being met through Mzansi", Standard Bank convenience banking director Lincoln Mali told Business Day.
"Over time we will think about modifications, but we're opening so many accounts at this stage, so we are clearly doing something right."
While participating banks will not profit from Mzansi in its first year, they do not expect to lose money, either.
According to Business Day, the longer-term aim is to "graduate" Mzansi account holders into users of more sophisticated banking products - ultimately swelling South Africa's banking market and boosting
the banks' bottom line.
SouthAfrica.info reporter
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