1 Access to financial services in South Africa FSCC presentation to Portfolio Committee on Finance National Assembly 26 August 2005

2 Contents FSCC Financial Sector Summit agreements on access Financial Sector Charter Initiatives underway Generic Access Standards

3 FSCC Financial Sector Campaign Coalition Registered as one of six sectors in Nedlac Community Constituency Represents Community Constituency on Financial Sector Charter Council Community chairs FS Charter Access Committee

4 FS Summit agreements Financial Sector Summit August 2002 Agreements on Access: –Ensuring access to basic financial services: 3.2. The parties will jointly research the economics of basic financial services and on that basis establish mechanisms and timeframes for achieving universal access

5 Financial Sector Charter 8. Access to financial services...ensuring the provision of first-order retail financial services, including: – savings products and services, being a first order basic and secure means of accumulating funds over time. (e.g. savings accounts, contractual savings products such as endowment policies –collective investments and community-based savings schemes – insurance products and services being the mitigation of impact of defined first order basic risks (e.g. life insurance, funeral insurance, burial society, household insurance and health insurance)

6 Financial Sector Charter ‘8….. substantially increase effective access to first-order retail financial services to a greater segment of the population, within LSM by 2008 to make available appropriate first-order retail financial services, affordably priced and through appropriate and accessible physical and electronic infrastructure such that: –a percentage (to be settled with the life assurance industry) of LSM 1-5 households have effective access to life assurance industry products and services –1% of LSM 1-5 plus 250,000 have effective access to formal collective investment savings products and services –6% of LSM 1-5 have effective access to short term risk insurance products and services 8.6 By 2005, the financial sector, with Government, undertakes to establish standards to monitor access and to design a mechanism for the ongoing evaluation and review of the impact of its initiatives on access’

7 Financial Sector Charter FS Charter Council –Charter Council Access Committee –Initiatives underway Mzansi LOA SAIA ACI

8 Generic Access Standards Charter Council study –Terms of reference Phase 1 –Literature review – analysis of standards, emphasis on developing countries & local research e.g. Financial Diaries, Finscope surveys –Access committee and experts interviews Phase 2 –Guidelines for South Africa Phase 3 –Evaluation of proposed products –Final recommendations –Delivery final report -10 October

9 Implementation, monitoring & evaluation Adoption of Access Standards –5 November 2005 Charter Council meeting –Launch of insurance access products December 2005 Commitment to ongoing monitoring & evaluation

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