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Banking the unbanked: the Mzansi intervention in South Africa

Philip Kostov (Lancashire Business School, University of Central Lancashire, Preston, UK)
Thankom Arun (Lancashire Business School, University of Central Lancashire, Preston, UK)
Samuel Annim (Lancashire Business School, University of Central Lancashire, Preston, UK)

Indian Growth and Development Review

ISSN: 1753-8254

Article publication date: 4 November 2014




This paper aims to understand household’s latent behaviour decision-making in accessing financial services. In this analysis, the determinants of the choice of the pre-entry Mzansi account by consumers in South Africa is looked at.


In this study, 102 variables, grouped in the following categories: basic literacy, understanding financial terms, targets for financial advice, desired financial education and financial perception. Using a computationally efficient variable selection algorithm, variables that can satisfactorily explain the choice of a Mzansi account were studied.


The Mzansi intervention is appealing to individuals with basic but insufficient financial education. Aspirations seem to be very influential in revealing the choice of financial services, and, to this end, Mzansi is perceived as a pre-entry account not meeting the aspirations of individuals aiming to climb up the financial services ladder. It was found that Mzansi holders view the account mainly as a vehicle for receiving payments, but, on the other hand, are debt-averse and inclined to save. Hence, although there is at present no concrete evidence that the Mzansi intervention increases access to finance via diversification (i.e. by recruiting customers into higher-level accounts and services), this analysis shows that this is very likely to be the case.


The issue of demand-side constraints on access to finance have been largely been ignored in the theoretical and empirical literature. This paper undertakes some preliminary steps in addressing this gap.



Kostov, P., Arun, T. and Annim, S. (2014), "Banking the unbanked: the Mzansi intervention in South Africa", Indian Growth and Development Review, Vol. 7 No. 2, pp. 118-141.



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