The Mzansi Bank Account Initiative

1. The Mzansi account is an entry-level bank account, based on a magnetic stripe debit card platform, developed by the South African banking industry and launched collaboratively by the four largest commercial banks together with the state-owned Postbank in October 2004. By December 2008, more than six million Mzansi accounts had been opened, a significant number in a country with an adult population of approximately 32 million. Today, at least one in ten South African adults currently has an Mzansi account; and one in six banked people are active Mzansi customers.

2. While not all Mzansi account holders are new to the banking system and not all newly banked are Mzansi account holders, the percentage of adults (age 16+) banked in South Africa has increased from 46% in 2004 to 63% in 2008 (see Table 1 below). This increase in a short period, coinciding with a period of mostly strong economic growth, indicates the pent-up demand for entry-level formal financial products among lower income people in the country and has attracted widespread local and international interest.

3. Although the Mzansi Initiative has attracted much commentary since its launch, there has to date been no in-depth independent review of the experience; and no evaluation undertaken as to whether the Mzansi account has at least fulfilled the expectations of the banks which launched it, and of the market at which it was targeted. This report seeks to answer three key questions about the Mzansi Initiative:

  1. What has happened to date, at a detailed level, with the Mzansi account rollout?
  2. Has the Mzansi account been a success in promoting wider access to financial services and banking in particular?
  3. What can be learned from this experience in South Africa and for other countries?