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TitleDeterminants of access to finance : an investigation into the Mzansi intervention
Publication TypeJournal Article
Year of Publication2012
AuthorsKostov, P, Arun, T, Annim, S
Paginationp. 397 - 412; 2 tab.
Date Published2012-07-01
PublisherEuropean Association of Development Research and Training Institutes
Place PublishedBasingstoke, UK
Keywordsdecision making, financial management, low-income communities, south africa
Abstract

This article aims to understand low-income household's latent behaviour in decision making around accessing financial services. We analyse the determinants of choice surrounding the pre-entry level bank account, Mzansi, by consumers in South Africa. Removing barriers to accessing finance should arguably generate large beneficial effects for low-income households, whereby the Mzansi account functions as the first step on the financial ladder for the previously unbanked. However, while previous research has focused primarily on supply-side barriers to accessing finance, based on assumptions that demand-side barriers are non-existent, we question this assumption and identify consumers’ financial perceptions and attitudes as a significant influence in determining demand for financial services among low-income households. Consequently, we argue that removing supply side constraints on its own is insufficient as a means to expand access to finance in developing countries. [authors abstract]

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