Mauritius can give itself a pat on the back for giving its citizens a high level of access to banking facilities, as the island economy boasts the highest level of financial inclusion in the Southern African Development Community (SADC).
A whopping 90% of adults aged 18 years and above in Mauritius enjoy access to financial services, according to the FinScope Consumer Mauritius 2014 survey, which covered around 4,000 respondents across both Mauritius and Rodrigues.
The survey reveals that the level of financial inclusion is high in Mauritius as only 10% of adults are unbanked, with the study finding that the main barriers were insufficient money coming in, coupled with insufficient balance after paying for expenses.
Overall, it states that 85% of the adult population is banked, 49% use non-bank products and services and 26% use informal mechanisms to manage their finances, while another 1.2% interestingly make use of bank accounts that are not registered on their names.
According to the survey, the level of financial inclusion is higher among males at 94% against 86% for females.
With regards to savings, the findings reveal that 65% of adults are saving at the bank while 30% do not save. Those who are in the saving chain also consist of a further 4% who have formal non-banking savings mechanisms, a further 2% who rely on informal saving mechanisms such as savings groups, while 3% are saving at home only.
As for loans, the results show that in the 12 months preceding the survey, about half (52%) of adults in Mauritius claimed to have either borrowed money or taken goods on credit. Of these, 27% of adults borrowed money from a bank, a further 7% used formal non-bank credit, 9% availed informal mechanisms such as money lenders, while 9% turned to friends and family only.
The survey also points out that use of remittances in Mauritius is low, with only 6% of adults sending or receiving money. Of these, 2% either send or receive money to or from people within Mauritius and 4% of adults send or receive money from overseas.
Mobile money continues to be a question mark, with the survey showing that though as many as 84% adult Mauritian use mobile phones but only 2% are registered users of mobile money, which the survey attributes mostly to lack of information on mobile money.
As for insurance, primarily motor vehicle and life insurance, it reveals that 75% adults perceive insurance as protection in case of problems only, and 62% do not have any kind of financial product covering risk.
To this end, the survey recommends that financial literacy/education campaigns could prove valuable to assist in the financial decision-making of adults.
The survey findings were released on Friday, 3 October by the FinMark Trust in collaboration with the Finance Ministry at the Labourdonnais Waterfront Hotel, Caudan, Port Louis.
Speaking on the occasion of the release, Governor Rundheersing Bheenick of the Bank of Mauritius emphasised the role of all the stakeholders in both the banking and non-banking sector to collaborate and tap those who are financially excluded.
According to him, more efforts should be made to tackle the issue of financial exclusion by encouraging banks to bring innovative changes to reach more people and review their service charges.
The Governor also spoke on introducing financial literacy in the education system, which, he noted, is a great means to sensitise people at a young age on using financial services.
He further stated that, in the next five years, Mauritius should be ready to target the 10% unbanked while citing India as a reference where in a day 15 million bank accounts have been opened.
He concluded by stressing on the need for an action programme to be worked out by all the stakeholders with a view to combat financial exclusion.
About the study
FinScope was launched in 2002 by the FinMark Trust based in Johannesburg, South Africa.
It is a comprehensive study on financial inclusion, looking at how people source their income and manage their financial lives.
Till date, FinScope Consumer Surveys have been conducted in 19 countries, including Mauritius.
Image (FinMark): The FinScope Consumer Mauritius 2014 survey, which covered around 4000 respondents across both Mauritius and Rodrigues, showed that only 10% adults in Mauritius are unbanked.
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