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Mobile Phone Banking and Low-Income Customers

This paper presents the first public findings on how low-income people view and use m-banking, using results of a survey of 515 low-income individuals in South Africa. Three hundred of those surveyed do not use m-banking, while 215 are customers of WIZZIT, a startup mobile banking provider. WIZZIT targets the 16 million South Africans who lack or have difficulty accessing formal banking services. The study was conducted in South Africa because it is the only country where an m-banking service is targeted at low-income people and where there are enough identifiable low-income customers to construct an adequate sample.

Although the findings are not representative of all low-income m-banking customers and potential customers, they are encouraging. WIZZIT’s low income customers give m-banking high marks for its convenience, accessibility, and affordability. A WIZZIT account is as much as one-third cheaper as an account at one of South Africa’s big retail banks for the same basket of services.

The study also sets out to determine which low income segments are using WIZZIT. Many WIZZIT customers are indeed poor, but they are not among South Africa’s poorest people. They tend to have more income and assets and be more financially and technologically sophisticated than other low-income South Africans. Finally, the study sought to understand perceptions about banking, technology, and m-banking among low-income people.

Part one of this paper introduces WIZZIT. Part two details findings from the survey in South Africa. Part three puts this research into a broader context to assist banks, mobile network operators, and other parties interested in extending financial services to low-income people. The study was designed by the Consultative Group to Assist the Poor (CGAP) and produced through a partnership among CGAP, the United Nations Foundation (UNF), and Vodafone Group Foundation (VGF). FinMark Trust made important contributions to the study methodology.

  • Resource type
  • Author Ivatury, G.; Pickens, M.
  • Year of Publication2006
  • Region
  • LanguageEnglish
  • Number of pages19 pp.

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