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MasterCard: Financially excluded, under-served customers still live within cash economy

News » Health and Beauty

20th June 2014

MasterCard has stated that both the financially excluded and underserved customers in the banking industry still rely on cash as a means of payment.

According to the report from the company “Both the financially excluded and financially underserved still live within a cash economy. Instead of benefiting from bank account features like direct debits, internet banking or buying discounted goods online, the bulk of excluded and underserved Nigerians use cash to pay for everyday items such as telecommunication (93 percent), clothing (92 percent), transportation (91 percent) and food (73 percent).

Though cash as a payment method remains prevalent, there are strong concerns about the safety and security in carrying cash. 56 percent said that the main benefit of a bank account is that it is safer than keeping cash at home. Another benefit of banks is the interest that they offer.”

Omokehinde Ojomuyide, Vice President and Area Business Head, West Africa, MasterCard, disclosed that the new report profiles the financially excluded and underserved in Nigeria and five other emerging markets (Egypt, India, Indonesia, Vietnam, and Philippines), providing insights into how to bring them into the economic mainstream.) “Road to Inclusion was commissioned by MasterCard to better understand what financial exclusion or under service means to the millions of people within this group, and what has triggered their choices. This is to better provide services that engage this marginalised audience and help them to reap the benefits of financial inclusion” she added.

In Nigeria, the average age of the financially underserved and excluded is 28 years old. 91 percent have achieved secondary education or above, and 64 percent hold a job. The average family household income of Nigerian respondents is just $200 a month. This results in lower disposable income, leading 41 percent of this group to cite “not having enough money” as the main reason for not having a formal bank account. Other reasons were that they “don’t want or need” a bank account (17 percent) or they feel that they need cash on a daily basis (four percent).

In testing whether prepaid cards would appeal to the unbanked and under-banked, the research showed that 66 percent thought that prepaid cards were “unique and different”, 60 percent said that prepaid cards were “relevant”, and 58 percent said they are likely to apply for a prepaid card.

While 65 percent of the respondents have heard of prepaid cards, none have used them. Interestingly, once educated about the concept, 53 percent of all respondents recognised that they would benefit from prepaid cards by not having to carry cash, while 26 percent acknowledged that prepaid cards would help them keep control of their spending.

Article Credit: Vanguard News

Updated 5 Years ago

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