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Effect of Perceptions and Behaviour on Access to and Use of Financial Service: Evidence from South Africa

Samuel Annim (), Thankom Arun () and Philip Kostov

No 7042, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study investigates the effect of financial perception and behaviour on; (a) general accounts and services, (b) investment/savings and (c) insurance/assurance Using FinScope dataset from South Africa over the period 2003 to 2009,ordered probit, generalized ordered probit and pseudo panel micro-econometric techniques have been employed. Results based on all three estimations support the hypothesis that financial perception has a greater effect on the decision to access and use general accounts and services. The cross section and pooled models confirm the hypothesis that the effect of financial behaviour is greater than financial perception when making decisions on the take-up and use of investment financial services. It is also observed that the degree of responsiveness of financial perception on access to, and use of financial services decreases as the depth of usage deepens from basic to advance levels of financial products. In a policy context, targeting demand-side factors to increase access to and use of financial services should be financial type and level specific. Furthermore, the approach should be based on an understanding of the experiences of borrowers.

Keywords: financial; perception; behaviour; general accounts; investment; insurance; South Africa (search for similar items in EconPapers)
JEL-codes: O16 O17 G02 O55 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2012-11
New Economics Papers: this item is included in nep-afr, nep-dev, nep-ias and nep-mfd
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