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

31 Pages Posted: 15 Dec 2012

See all articles by Samuel Kobina Annim

Samuel Kobina Annim

University of Manchester

Thankom Gopinath Arun

University of Central Lancashire

Philip Kostov

University of Central Lancashire

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

JEL Classification: O16, O17, G02, O55

Suggested Citation

Annim, Samuel Kobina and Arun, Thankom Gopinath and Kostov, Philip, Effect of Perceptions and Behaviour on Access to and Use of Financial Service: Evidence from South Africa. IZA Discussion Paper No. 7042. Available at SSRN: https://ssrn.com/abstract=2189780

Samuel Kobina Annim (Contact Author)

University of Manchester ( email )

Arthur Lewis Building
Oxford Road
Manchester, M13 9PL
United Kingdom

HOME PAGE: http://ssrn.com/author=1001830

Thankom Gopinath Arun

University of Central Lancashire ( email )

United Kingdom

Philip Kostov

University of Central Lancashire ( email )

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