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Access to financial services and implications of poverty in South Africa
Thesis (PhD)--Stellenbosch University, 2025.
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Stellenbosch : Stellenbosch University
2025
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| _version_ | 1867613775452962816 |
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| access_status_str | Open Access |
| author | Batala, Lusanda |
| author2 | Kleimeier, Stefanie |
| author_browse | Batala, Lusanda Kleimeier, Stefanie |
| author_facet | Kleimeier, Stefanie Batala, Lusanda |
| author_sort | Batala, Lusanda |
| collection | Thesis |
| dc_rights_str_mv | Stellenbosch University |
| description |
Thesis (PhD)--Stellenbosch University, 2025. |
| format | Thesis |
| id | oai:scholar.sun.ac.za:10019.1/132064 |
| institution | Stellenbosch University (South Africa) |
| last_indexed | 2026-06-10T12:41:30.564Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from SUNScholar — Stellenbosch University Repository |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | Stellenbosch : Stellenbosch University |
| publisherStr | Stellenbosch : Stellenbosch University |
| record_format | dspace |
| source_str | SUNScholar — Stellenbosch University Repository |
| spelling | oai:scholar.sun.ac.za:10019.1/132064 Access to financial services and implications of poverty in South Africa Batala, Lusanda Kleimeier, Stefanie Sander, Harald Adjasi, Charles Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School. Financial services industry -- South Africa Finance, Personal -- South Africa Banks and banking -- South Africa Poverty -- South Africa Economic assistance, Domestic -- South Africa UCTD Thesis (PhD)--Stellenbosch University, 2025. Batala, L. 2025. Access to financial services and implications of poverty in South Africa. Unpublished doctoral dissertation. Stellenbosch: Stellenbosch University [online]. Available: https://scholar.sun.ac.za/items/1c885a8c-74ba-4581-ba83-adf157a7d634 ENGLISH SUMMARY: This thesis sheds light on the factors that drive access to formal, semi-formal, and informal financial services in South Africa. This is critical for policymaking. Therefore, the primary purpose of the thesis is to clearly articulate the determinants of access to financial services by individuals in South Africa and to illustrate that being in poverty is a determinant of access to financial services. Access to financial services is well entrenched in South Africa, with various initiatives, such as the financial sector charter and bank products targeting the lower end of the market (e.g., Mzansi accounts). As a result, the percentage of banked South Africans has increased. However, South Africa still faces challenges concerning access to financial services, which is uneven. In addition, the high concentration of large banks, which account for more than 84 per cent of assets within the banking sector, also stifles access to financial services in the country. Access to financial services in South Africa is not equal across all groups. Race and gender remain important variables in the lack of access, and Black African women are at the bottom of the pile (Derera et al., 2014). Moreover, despite the increase in informal financial services, policymakers and researchers have paid limited attention to this area. Instead, more focus has been on formal financial services. As a result, there is no clear articulation of what factors determine an individual’s choice of formal, semi-formal or informal financial services. Literature has shown no straightforward approach to defining and measuring access to financial services. However, there are specific characteristics, such as constant availability of financial services, quality of financial services, and potential contribution to well-being. The thesis helps understand that the link between access to financial services and poverty is two-dimensional, and the two need not be dealt with separately or in isolation. Therefore, the broad research question for this thesis is to understand what determines the factors of access to financial services and the implications of being in poverty. The specific research questions the thesis answers include: ✓What are the individual factors that determine access to financial services? ✓Do the determinants of access to financial services differ when an individualaccesses the services through formal, semi-formal, or informal means? ✓What is the role of subjective poverty on access to financial services? ✓How does the economy, inflation, and banking concentration affect access tofinancial services? The thesis begins with a description and analysis of access to financial services. After that, explanatory analysis is followed to investigate the determinants of access to financial services and how banking concentration, economic growth, and inflation influence an individual’s decision-making on accessing financial services. The conditional fixed-effect logistic regression model has been applied to analyse the determinants of access to financial services using demographic indicators, banking concentration, growth, and inflation as independent variables. The thesis uses various proxies to measure access to financial services, such as a bank account, bank bond, micro-lender loan, stokvel, and friend or family loan, to test the determinants of access using the poverty dimension. Using the National Income Dynamics Study (NIDS) 2008-2017, a nationally represented households’ survey dataset from South Africa, the thesis is theoretically underpinned by an access possibility frontier conceptual framework that identifies different demand and supply constraints on broad access to financial services. The objective is to arrive at an enhanced understanding of what factors drive an individual to access financial services through a particular institution or form. What influences the decision-making process of an individual? The empirical findings indicate that microeconomic and macroeconomic effects support the importance of an inclusive financial system. Microeconomic aspects influence access to financial services: The thesis provides compelling evidence of income, employment, education level, life satisfaction, banking concentration, and favourable macroeconomic conditions as the key determinants of access to financial services in South Africa. A striking finding is that poverty – subjective well-being – is a factor in the lack of access to financial services. The study finding is that an individual is less likely to access financial services without income or employment regardless of the form – formal, semi-formal or informal. In other words, a poor individual without income is less likely to access financial services. The findings conclude that determinants of access to financial services differ between formal, semi-formal and informal. The results also confirm that access to a bank account opens up more opportunities for an individual to broaden access to other financial services. The results further indicate the significance of having a bank account on formal access to financial services and other forms of access to financial services. The study found that having a bank account increases an individual’s odds of accessing a bank bond, micro-lender loan, stokvel or loan from a friend or family member. The research also debunks the myth that informal financial services are for the illiterate. For example, tertiary education is one of the determinants of access to a stokvel in South Africa. Therefore, policymakers need to be mindful of the interaction between access to financial services and poverty. Also, policymakers must balance access to formal, semi-formal and informal financial services. For example, are there innovative ways to use financial services without converting one to another, such as informal to formal? The policy implications of the study are instructive. Government efforts to promote access to financial services are synonymous with encouraging growth. Interventions can be pursued based on evidence-based knowledge that the well-being of an individual fosters access to financial services. Thus, interventions should ideally target the poor who rely more on informal financial services than formal financial services. AFRIKAANSE OPSOMMING: Hierdie proefskrif werplig op die faktore wat toegang tot formele, semi-formele en informele finansiele dienste in Suid-Afrika dryf. Dit is van kritieke belang vir beleidmaking. Daarom is die primere doel van die proefskrig om die bepalers van toegang tot finansiele dienste deur individue in Suid-Afrika duidelik te verwoord en te illustreer dat armoede 'n bepaler is vir toegang tot finansiele dienste. Toegang tot finansiele dienste is goed verskans in Suid-Afrika, met verskeie inisiatiewe, soos die handves van die finansiele sektor, en bankprodukte wat op die onderste punt van die mark gerig is (bv. Mzansi rekenings) As gevolg daarvan, die persentasie van gebankde Suid-Afrikaners het toegeneem. Suid-Afrika staar egter steeds uitdagings in die gesig rakende toegang tot finansiele dienste, wat ongelyk is. Boonop smoor die hoe konsentrasie groot banke, wat meer as 84 persent van bates binne die banksektor uitmaak, ook toegang tot finansiele dienste in die land. Toegang tot finansiele dienste in Suid-Afrika is nie gelyk in alle groepe nie. Ras en geslag bly belangrike veranderlikes in die gebrek aan toegang, en Swart Afrikaanse vroue is onderaan die stapel (Derera et al., 2014). Boonop, ongeag die toename in informele finansiele dienste, het beleidmakers en navorsers beperkte aandag aan hierdie gebied gegee. In plaas daarvan is meer fokus op formele finansiele dienste. Gevolglik is daar geen duidelike artikulasie van watter faktore 'n individu se keuse van formele of semi-formele of informele finansiele dienste bepaal nie. Literatuur het geen eenvoudige benadering tot die definiering en meting van toegang tot finansiele dienste getoon nie, maar daar is spesifieke eienskappe, soos konstante beskikbaarheid van finansiele dienste, kwaliteit van finansiele dienste en potensiele bydrae tot welstand. Die proefskrif help om te verstaan dat die verband tussen toegang tot finansiele dienste en armoede tweedimensioneel is, en dat die twee nie afsonderlik of in isolasie hanteer hoef te word nie. Daarom is die bree navorsingsvraag vir hierdie proefskrif om te verstaan wat die faktore van toegang tot finansiele dienste en die implikasie van armoede bepaal. Die spesifieke navorsingsvrae wat die proefskrif beantwoord, sluit in: ✓ Wat is die individuele faktore wat toegang tot finansiele dienste bepaal? ✓ Verskil die bepalers van toegang tot finansiele dienste wanneer 'n individu toegang tot die dienste verkry op formele of semi-formele of informele wyse? ✓ Wat is die rol van subjektiewe armoede op toegang tot finansiele dienste? ✓ Wat is die rol van die ekonomie, inflasie en bankkonsentrasie op toegang tot finansiele dienste? Die proefskrif begin met 'n beskrywing en ontleding van toegang tot finansiele dienste. Daarna word voorspellende ontleding gevolg om die bepalers van toegang tot finansiele dienste te ondersoek en hoe die bankkonsentrasie, ekonomiese groei en inflasie 'n individu se besluitneming oor toegang tot finansiele dienste beinvloed. Die voorwaardelike vaste-effek logistieke regressiemodel is toegepas om die determinante van toegang tot finansiele dienste te ontleed deur demografiese aanwysers, bankkonsentrasie, groei en inflasie as onafhanklike veranderlikes te gebruik. Die profskrif gebruik verskeie gevolmagtigdes om toegang tot finansiele dienste te meet, soos bankrekening, bankverband, mikrolenerlening, stokvel en vriend- of familielenings om die bepalers van toegang met behulp van die armoededimensie te toets. Met behulp van die National Income Dynamics Study (NIDS) 2008-2017, 'n nasionaal verteenwoordigde huishoudingsopnamedatastel uit Suid-Afrika, word die proefskrif teoreties ondersteun deur 'n toegangsmoontlikheidsgrenskonseptuele raamwerk wat verskillende vraag- en aanbodbeperkings op bree toegang tot finansiele dienste. Die doel is om tot 'n beter begrip te kom van watter faktore 'n individu dryf om toegang tot finansiele dienste deur 'n bepaalde instelling of vorm te verkry. Wat beinvloed die besluitnemingsproses van 'n individu? Die empiriese bevindings dui op verskeie positiewe mikro-ekonomiese en makro-ekonomiese effekte wat die belangrikheid van 'n inklusiewe finansiele stelsel ondersteun. Daar is mikro-ekonomiese aspekte wat toegang tot finansiele dienste beinvloed: die proeskrif bied oortuigende bewyse van inkomste, indiensneming, onderwysvlak, lewensbevrediging, bankkonsentrasie en gunstige makro-ekonomiese toestande as die sleutelbepalers van toegang tot finansiele dienste in Suid-Afrika. 'n Opvallende bevinding is dat armoede – subjektiewe welstand – 'n faktor is in die gebrek aan toegang tot finansiele dienste. Die studiebevinding is dat 'n individu minder geneig is om toegang tot finansiele dienste te verkry sonder inkomste of indiensneming, ongeag die vorm – formeel of semi-formeel of informeel. Met ander woorde, 'n arm individu sonder inkomste is minder geneig om toegang tot finansiele dienste te kry. Die bevindinge kom tot die gevolgtrekking dat bepalers van toegang tot finansiele dienste verskil tussen formeel, semi-formeel en informeel. Die resultate bevestig ook dat toegang tot 'n bankrekening meer geleenthede vir 'n individu bied om hul toegang tot ander vorme van finansiele dienste te verbreed. Die resultate dui verder op die belangrikheid daarvan om 'n bankrekening te he oor formele toegang tot finansiele dienste en ander vorme van toegang tot finansiele dienste. Die studie het bevind dat 'n bankrekening 'n individu se kans verhoog om toegang tot 'n bankverband, mikrolenerlening, stokvel of lening van 'n vriend of familielid te verkry . Die navorsing ontken ook die mite dat informele finansiele dienste vir ongeletterdes is. Tersiere onderrig is byvoorbeeld een van die bepalers van toegang tot 'n stokvel in Suid-Afrika. Daarom moet beleidmakers bedag wees op die interaksie tussen toegang tot finansiele dienste en armoede. Beleidmakers moet ook 'n balans vind tussen toegang tot formele, semi-formele en informele finansiele dienste. Is daar byvoorbeeld innoverende maniere waarop finansiele dienste gebruik kan word sonder om die een na die ander om te skakel, soos informeel na formeel? Die beleidsimplikasies van die studie is insiggewend. Die regering se pogings om toegang tot finansiele dienste te bevorder, is sinoniem met die aanmoediging van groei. Intervensies kan nagestreef word op grond van bewysgebaseerde kennis dat die welstand van 'n individu toegang tot finansiele dienste bevorder. Ingrypings moet dus ideaal wees vir armes wat meer op informele finansiele dienste staatmaak as formele finansiele dienste. Doctoral 2025-05-22T06:34:01Z 2025-05-22T06:34:01Z 2025-03 Thesis https://scholar.sun.ac.za/handle/10019.1/132064 Stellenbosch University xxii, 411 pages : illustrations, includes annexures application/pdf Stellenbosch : Stellenbosch University |
| spellingShingle | Financial services industry -- South Africa Finance, Personal -- South Africa Banks and banking -- South Africa Poverty -- South Africa Economic assistance, Domestic -- South Africa UCTD Batala, Lusanda Access to financial services and implications of poverty in South Africa |
| title | Access to financial services and implications of poverty in South Africa |
| title_full | Access to financial services and implications of poverty in South Africa |
| title_fullStr | Access to financial services and implications of poverty in South Africa |
| title_full_unstemmed | Access to financial services and implications of poverty in South Africa |
| title_short | Access to financial services and implications of poverty in South Africa |
| title_sort | access to financial services and implications of poverty in south africa |
| topic | Financial services industry -- South Africa Finance, Personal -- South Africa Banks and banking -- South Africa Poverty -- South Africa Economic assistance, Domestic -- South Africa UCTD |
| url | https://scholar.sun.ac.za/handle/10019.1/132064 |
| work_keys_str_mv | AT batalalusanda accesstofinancialservicesandimplicationsofpovertyinsouthafrica |