CAPETOWN, South Africa - South Africa's financial institutions will launch a national banking account aimed at luring the unbanked population into the banking system by 2004's third quarter.
According to a report in Business Day, by 2014, South Africa hopes to add some 8 million new cardholders to the existing base of about 13 million South Africans with bank accounts.
Banks have agreed to provide an access point for finance such as an ATM or a bank within 20 kilometers (about 12 miles) of 80 percent of South Africa's low-income earners. About 14 million South Africans, or roughly half the country's adult population, fall into this category.
A national bank account with minimum charges will a vital tool in meeting the requirement, according to Business Day.
Standard Bank's Charles Chemel said the new account will have no monthly maintenance charges. No switch fees will be levied on ATM withdrawals, although a small ATM charge will be levied.
Chemel said he believed the account could attract between 3 million and 4 million customers within four years.
To ensure that retail banks take ownership of the project, ATM cards for the new account will be co-branded with the national bank account logo as well as that of the issuing bank.
Absa director Louis van Zeuner conceded there was a risk that the account would cannibalize existing banking customers to some degree. However, he said, ultimately people would use the low income account as an entry point into the bank sector. Once customers are in the system, they will demand more sophisticated banking products, which will boost the number of banking customers in the long run.
Besides banking, the national charter also obliges short-term insurers and life assurers to ensure low income earners have effective access to their products, according to Business Day.
