54% believe that financial services are essential to prosperity - survey
DURBAN - The world’s first Financial Prosperity Barometer by PayU surveyed multiple markets and global regions to establish how they perceived the concept of prosperity and found a clear connection between perceived prosperity and access to financial services.
Globally, three in five people believe that financial services have helped them to increase their prosperity and a staggering 48 percent think that you cannot be prosperous without access to financial services. In South Africa, this connection is even deeper – 54 percent believe that financial services are essential to prosperity (‘People can’t be prosperous if they don’t have access to financial services’) while 83 percent believe they are essential for planning for future prosperity.
South Africans fundamentally believe that access to financial services is critical to empowering their own prosperity. This sentiment is echoed across Africa. Access to financial services is perceived as being essential to ensuring prosperity and financial growth and inclusion. This perception is reinforced by the rise of solutions within the FinTech space that capitalise on both the need for more accessible financial services and the constantly expanding reach of mobile - GSMA estimates that mobile phone penetration will reach a subscriber base of just over 600 million in Africa by 2025.
According to PayU’s Financial Prosperity Barometer: Perceptions of prosperity in high-growth markets people in Africa have higher access to payment services than the other surveyed regions (South America, Europe, Middle East and Asia) with around 63 percent able to send and receive money compared to the global average of 49 percent. The survey also found that South Africans have one of the highest preferences for using mobile money providers to deposit, borrow and save money, aligning with the impressive growth of money mobile services in the region.
The demand for these services is not only driven by the need to have financial security. People who feel that financial services are available to them are more likely use them as a way to grow money, insure health and property, and build their own prosperity. The perception is that financial services empower people to do more with their money, allowing them grow and invest it in new ways and with better long-term results. The PayU survey found that 25 percent of people in Africa preferred to manage money on mobile (deposits) with only Asia coming in second place with 5 percent. It’s a huge percentage difference that highlights how reliant the continent has become on mobile money innovation.
The meteoric success of M-PESA in Kenya is just one impressive case in point – there has been similar growth in mobile financial solutions across Africa that cater to a wide variety of needs and demographics. In 2017, the GSMA found that half of all mobile money services in the world were located in Africa, a market changing at speed to adapt to its lack of financial infrastructure and access to services.
For South Africans, financial services are critical to long-term prosperity and success. At 54 percent most believe that financial services are the only route to prosperity while 63 percent believe that access will make them even more prosperous. There’s a clear preference for mobile money providers to help with saving and growing money and sourcing long-term investment solutions. From deposits to money management to investments, South Africans prefer mobile money and accessible financial services and see them as tools they can use to empower their financial futures. They also felt that access to credit and financial services would help to reduce financial stress and uncertainty.
The adoption of mobile money solutions and the growing access to financial services in Africa has started to transform how people approach money, savings and their future. People from growing range of demographics can now access services that were previously unavailable to them, and they are increasingly empowered by to make more informed financial choices. Education and access will have a significant impact on the growth of this market and will likely see even more South Africans achieve a more financial stable foundation.
Karen Nadasen, Country Manager of PayU South Africa said, "South Africans understand the value that financial services can offer them and their future but they want them to be more accessible, less confusing and more relevant. South Africans want to save, invest and grow their money and they want to do it with the right support and systems in place. There’s a demand for expert advice and support that provides South Africans with the tools and information they need to really drive financial inclusion deeper into rural communities and to reshape the economic picture of the country".
BUSINESS REPORT ONLINE