Determinants of Access to Finance: An Investigation into the Mzansi Intervention

Kostov, Phillip orcid iconORCID: 0000-0002-4899-3908, Arun, Thankom Gopinath and Annim, Samuel Kobina (2012) Determinants of Access to Finance: An Investigation into the Mzansi Intervention. The European Journal of Development Research, 24 (3). pp. 397-412. ISSN 0957-8811

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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.

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