Alternative Banking is defined as the provision of a broad range of financial services, including transactional, savings, credit and insurance services to the low income and poor segment of the population at attractive prices by a range of financial institutions including banks, in an effort to support economic development and poverty reduction.
In 2011, the Finscope survey reported that 62.8% of South Africans are banked. The figure rose to 77% in 2013 due to the introduction of the SASSA accounts. The issue still remains that more than 10 million South Africans remain unbanked.
The 2014 survey report indicates that 17.7m adults were financially included in 2004 versus 31.4m.iin 2014 and that Individuals who only rely on informal mechanisms have been reduced from 3.4 million in 2004 to 2.1 million in 2014.
The 2015 FinScope survey shows that in South Africa levels of financial inclusion remain stable at 87% compared to 86% in 2014.The Finscope 2016 Survey indicates that a total of 77% of all adults have a bank account. However, if the SASSA card holders are excluded only 58% of adults are banked.
Alternative banking is therefore closely linked to poverty alleviation and job creation. Earning an income affords one the liberty to participate in society in their own terms.