Banks have a duty to teach clients

Isaac Moledi

Isaac Moledi

Nedbank wants all financial institutions to intensify consumer education and undertake on-going educational efforts to ensure that Mzansi account holders are retained and can make informed choices.

There has been a phenomenal growth in the number of South Africans holding Mzansi accounts. A total of about 3,1million Mzansi accounts were opened by December.

Launched in October 2004 as an affordable banking solution for the unbanked, Mzansi was introduced to fulfil the objectives set out in the Financial Sector Charter to extend banking access to the unbanked.

Nedbank believes Mzansi's phenomenal growth is an indication of the progress made by banks in ensuring the financial inclusion of all South Africans. It says that education is now necessary to retain the account holders in the system.

Saks Ntombela, managing director of Nedbank transactional and investment products, emphasises the need for ongoing education.

He says even people with bank accounts continue to use unregulated financial providers such as illegal microlenders.

This, in Ntombela's view, is because the account holders do not believe a bank account makes financial sense for day-to-day transactions.

Ntombela says a lack of basic knowledge on how to manage an account often results in the closure of bank accounts.

He says it is important that the newly banked understand the basics of banking to get the best value by keeping their accounts under control.

"Exposing them to other ways of keeping bank charges as low as possible such as via a debit order facility and through cellphone banking for balance enquiries and statements is another means of ensuring good banking behaviour."

He says consumer education is at the core of Nedbank's mass-market strategy.

"This education needs to happen at community level, through face-to-face training, which enables you to explain the different accounts and services and how they work, as well as carrying out physical demonstrations on how to use various channels such as ATMs."