According to the Financial Sector Conduct Authority, there is a high rate of inclusion in the SA banking industry. Picture: Nadine Hutton / Bloomberg
THE Financial Sector Conduct Authority (FSCA) said on Tuesday the number of individuals in the banking sector was at a relatively high rate with only 2% of the population, which is estimated at 7 million, being excluded.
Briefing the joint meeting of the finance standing committee and trade, industry, and competition portfolio committee, FCSA’s head of policy support, Kershia Singh, said there were 37 386 910 banked adults in South Africa.
Singh also said the number of previously banked adults was 1 855 980 and 5 442 809, and the number of unbanked adults was 7 298 789.
“We see that formal inclusion is at a relatively high rate with only 2% of the population being excluded although that translated to seven million customers,” she said.
Singh also said in terms of micro-small business enterprises, 84% (2 553 372) were financially included and 15% (473 926) were financially excluded.
“We have a relatively high level of exclusion of 15%. Even among the formally banked, there are instances where business owners use their personal accounts as business accounts rather than as standalone accounts,” she said.
Of those financially included, 82% were formally served and 31% were informally served.
There were 2 426 869 micro-small business enterprises that were driven by cash transactions and savings, while 1 322 408 were served by other formal financial institutions.
Her presentation showed that most low-income individuals (57%) and micro-small enterprises used their accounts on a monthly basis only.
“The most prominent use cases for low-income individuals and micro-small enterprises are centred around cash usage (withdrawing and depositing cash).
“Nearly half (47%) of surveyed micro and small businesses only accept cash payments.”
The presentation also said businesses that do not accept digital payments cited high costs, including transaction fees.
“Other barriers included concerns about the reliability of digital payment systems during power outages or network issues.”
At least 89% of micro small medium enterprises were satisfied with their account providers.
“Among the 11% who expressed dissatisfaction, 48% highlighted the desire for lower transaction fees and 34% sought better access to credit facilities.
FCSA deputy commissioner Katherine Gibson said their institution has fairness at its heart, fair treatment of customers especially those vulnerable and those needed to build the productive capacity of the county, the small businesses.
“We share parliamentary members’ view about the urgency to consider transformation. Financial sector transformation is an economic imperative,” Gibson said.
“We take seriously the role FSCA plays in promoting the highest standard of consumer protection,” she said.
Gibson added that certain transformation targets may be an enabler of transformation.
“The FCSA is well placed to engage the sector to leverage its supervisory power to drive real economic transformation by setting the right standards of conduct and behaviour,” she said.
mayibongwe.maqhina@inl.co.za