Open AccessUnderstanding the drivers of financial inclusion in South Africa
Author(s) -
David Mhlanga,
Steven Henry Dunga,
Tankiso Moloi
Publication year - 2021
Publication title -
journal of economic and financial sciences
Language(s) - English
Resource type - Journals
eISSN - 2312-2803
pISSN - 1995-7076
DOI - 10.4102/jef.v14i1.594
Subject(s) - financial inclusion , proxy (statistics) , investment (military) , financial services , poverty , logistic regression , finance , variables , business , economics , marital status , salary , financial literacy , inclusion (mineral) , demographic economics , economic growth , politics , sociology , medicine , market economy , population , demography , machine learning , computer science , political science , law , gender studies
Orientation: Financial inclusion is becoming one of the attractive topics at the global level with policymakers, development partners, governments and financial institutions developing interest in understanding it more deeply.Research purpose: The study sought to establish the drivers of financial inclusion in South Africa with a focus on factors that influences ownership of an investment account.Motivation for the study: Motivated by the increase in the evidence of the importance of financial inclusion in fighting poverty and the fact that by merely having a bank account, financial inclusion cannot be guaranteed, the study interrogated the factors that influence households to have an investment account.Research approach/design and method: As the dependent variable of financial inclusion was binary, the logistic regression was used to estimate the drivers of financial inclusion. The variable assumed two values 0 and 1, where 1 represents access to an investment account and 0 otherwise.Main findings: Using the logit model, the study discovered that financial inclusion is driven by age, education level, the total salary proxy of income, race, and marital status.Practical/managerial implications: The differences in the probability of demand for financial products and services amongst the different races mean that products and services tailor-made to satisfy the needs of the different races, for coloured and black people these products and services should be designed to improve financial inclusion amongst them.Contribution/value-add: The study managed to discover the factors that influences households to have an investment account in South Africa.