An investigation into factors impacting financial exclusion at the bottom of the pyramid in South Africa

Abstract

Financial exclusion has been shown to have negative socioeconomic effects on citizens, especially at the bottom of the economic pyramid. South Africa suffers from high levels of financial exclusion, disproportionately at the bottom of the pyramid. This study investigates nine factors identified from the literature as being positively associated with financial exclusion using a logistic regression model. The findings show that the most significant factors associated with being financially excluded at the bottom of the pyramid in South Africa were educational level, primary source of income, age, home language and number of dependents. The study further found that gender, relationship status and home ownership were not associated with being financially excluded. An interesting finding was that living in a rural area as opposed to an urban area was not significantly associated with being excluded. The findings and their implications for expanding financial inclusion at the bottom of the pyramid are discussed.

Financial Inclusion for Sustainable Economy: Empirical Evidence from Nigeria

“…For instance, the short-run dynamics of financial inclusion against the run-off of growth per capital income, shows that rural deposit (RL), number of banks branches are statistically significant individually in the short-run and; only rural deposit is statistically significant individually in the over-parameterized estimates. This outcome is against that of Wentzel, et al [16]. South Africa, but in-line with [4].…”

“…This expansion is seismic in nature, that is, private and public expansion. Thus, banks intermediation at this level is at the peak [10,16,4]. For the purpose of this study, deposit to the private sector is mirrored for urban deposit.…”

“…Accordingly, the explanatory study confirmed the reason why nations should be allowed to take actions concerning their all-inclusiveness without external interference. [16] also opined that exclusion in South Africa is as a result of level of education, income sources, age and high number of dependants. From the logistic regression used for the study, educational level attainment is at the bottom of pyramid of financial excluded citizens.…”

Untitled

“…Financial exclusion is another issue which impacts the wellbeing of the economic participants, particularly minority participants in an economy and hinders their contributions towards economic developments of a country (Louth & Burns, 2018). In South African context, Wentzel, Diatha and Yadavalli (2016) commented that financial exclusion has been shown to have negative socio-economic effects on citizens, especially those who are situated at the bottom of the economic pyramid. Sain, Rahman and Khanam's paper which is published in this issue of AABFJ looked at financial exclusion issue from a different perspective, that is from a religious perspective.…”

Determinants of Financial Inclusion in Southern Africa

“…Financial inclusion has become an attractive topic at the global level with governments, financial institutions, and policymakers, developing interest in understanding it more deeply (Amoah et al 2020. The existence of financial exclusion has been acknowledged by many developed and developing nations as one of the socio-economic challenges on the agenda (Sarma and Pais, 2011;Wentzel et al, 2016). The World Bank in its 2020 targets placed universal financial access as one of its objective (Demirguc-Kunt et al, 2018, WBG, 2018.…”