- Title
- Financial services use in a rural context: a case of rural communities in South Africa
- Creator
- Maciko,Loyiso
- Subject
- Finance --South Africa Financial institutions -- South Africa
- Date Issued
- 2020
- Date
- 2020
- Type
- Thesis
- Type
- Doctoral
- Type
- PhD (Economics)
- Identifier
- http://hdl.handle.net/10353/18930
- Identifier
- vital:42999
- Description
- The thesis focuses on the gap between access and usage of financial services in rural communities of South Africa by using primary data and secondary data. It seeks to examine the factors that affect financial inclusion in rural communities of South Africa and to investigate South African trends regarding utilisation of financial services. This is since there has been an increase on adoption of financial services in South Africa however, this has not been complemented by effective usage. This rise in access of banks paints a misleading picture that majority of South Africans are included while the usage strand remains unmet as most people use bank accounts as a ‘mailbox’. This creates interest on what might be the underlying causes for lack of use, particularly in rural areas. This study adopts a mixed-methods approach in the form of exploratory sequential approach. This study was done in two stages. Firstly, focus groups were conducted in 20 villages from the Eastern Cape and Kwa-Zulu Natal. During the second stage, the quantitative research was conducted, using Finscope data for all provinces covering 2013 to 2017. For data analysis the Binary logistic regression and Multinomial regressions were adopted The study discovered that rural households from the Eastern Cape and Kwa-Zulu Natal, Limpopo and other provinces, dominated by rural areas, are often detached from the formal economy. As is the case with the rural residents that partook in this study relative to Gauteng, they did not derive any benefit from most formal economic initiatives or policies aimed at improving their well-being through access and use of financial services. Secondly, lack of income, trust, costs of financial services and distance to the nearest financial service provider remain barriers to use of financial services. To have a qualification or degree is regarded as an important factor that influences whether one saves at a bank. This causes rural residents with less education to rely on more informal saving methods. Furthermore, this study showed that households in rural locations of South Africa were either not aware or confident enough about the use and benefits of insurance and other financial services. Therefore, awareness campaigns should be promoted to gain client confidence by educating the current and potential clients. Rural households should be made aware of the safety that financial institutions give them, the interest rates earned, and the benefits that come with investing in formal institutions contrary to not investing. This study suggests that access and use of financial services has a non-uniform impact on household wealth. Thus, for effective poverty eradication in rural communities, there is a need for customized financial services and products aimed at addressing the explicit needs of the marginalised, as their needs diverge along the poverty distribution line. The results provide support to Andersen’s model as a mechanism that can be used to explain the demand-side perspective within the South African rural context. The study has made an empirical contribution tailored to the South African context. This study contributes to the current body of literature by applying the modified version of the Andersen Behavioural Model to financial vi services. It further contributes to the understanding of the relationship between the barrier to use or not use financial services in South African rural areas. It proposes that for financial market participation in the old traditional banking way there is a need to bring services to the people, and design the financial products in the manner that addresses the specific needs of the people in rural communities.
- Format
- 271leaves
- Format
- Publisher
- University of Fort Hare
- Publisher
- Faculty of Management and Commerce
- Language
- English
- Rights
- University of Fort Hare
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UFH Department of Economics
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | MACIKO L 200601214 PHD ECONOMICS.pdf | 2 MB | Adobe Acrobat PDF | View Details Download |