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Media Release by the Banking Association 18 May 2005

The Mzansi Account 1 Million Account-holders in Seven Months South Africa’s Banking Industry Makes Significant Inroads to Provide Access to Unbanked Population. Media Release by the Banking Association 18 May 2005. Agenda.

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Media Release by the Banking Association 18 May 2005

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  1. The Mzansi Account 1 Million Account-holders in Seven MonthsSouth Africa’s Banking Industry Makes Significant Inroads to Provide Access to Unbanked Population Media Release by the Banking Association 18 May 2005 Vers1.2

  2. Agenda • Actively meeting Charter Objectives for Access to First-order Banking Services • International comparison: % Unbanked • Data profile • Performance Highlights • Product Performance • Profile of Mzansi Account-holders & Usage • Impact on existing business • Account Performance: Conclusion • Next Phases • Contact Persons

  3. Actively Meeting Charter Commitments • The Banking Industry is elated to announce that in early May 1 million Mzansi Accounts had been opened; • Seven months after launched in October 2004 • While we understand that even 1 million Mzansi Account-holders is just a start in the grand scheme of Charter objectives; • It is a great start for ensuring there is access to first-order banking for all South Africans

  4. Actively Meeting Charter Commitments/2 • The current trends and account dynamics are largely consistent with those presented at the half-million threshold in February: • Similar market demand, circa 6,000 accounts per day; • Similar contributions from each of the participants; • Similar proportions of new clients for each participant; and • Gender ratios consistent • Macro-objective: increase the ratio of banked/ unbanked from its odd-49% in 2004 to credible level • Recognition to Community, Labour & Government for their support in this achievement

  5. Where is RSA in “Pecking Order”% Unbanked • India 80% • Egypt 77% • Poland 70% • Mexico 65% • SOUTH AFRICA 54% (48% - 15 May 2005) • Argentina 51% • Malaysia 45% • Ireland 37% • Australia 15% • Canada 15% • USA 12% • UK 09% • Germany 02% • Source: VISA International & Global Insights, 2004 data (Slightly dissimilar to FMT data, but offers international comparisons)

  6. Where is RSA in “Pecking Order”% Unbanked/2 • In past seven months an additional 4 percentage points (8%) of RSA population banked (via Mzansi Account): • [Excludes: • All other products from all banks and PostBank] • Places RSA at same level as Argentina and a step away from Malaysia and then Ireland

  7. Data Profile • Data is aggregated for the participant group • No data provided at individual participant level • Each bank & PostBank will provide their data as they see fit

  8. Performance Highlights • Accounts opened • 15 Nov ’04: 100 000 • 13 Dec ’04: 250 000 • 31 Jan ’05: 510,150 • 1 000 000 account-holders on 3 May 2005 • Circa 6 000 accounts being opened daily • Gender split: Majority female • Provincial distribution: 50% between Gauteng & KZN • New clients: 90% new to their particular institution • Average balance size: R 325 • In past 30 days: • Deposits: almost 38% made a deposit • Withdrawals: 45% made a withdrawal • POS transactions: 1.4%

  9. Product Performance and Client Profiles

  10. Rate of Account Opening • @ 3 May industry had 1 million Mzansi Account-holders • On average 6,500 accounts per business day • Best month February • Decreasing trend (but still opening > 6,000 accounts daily) • Best day to date: 1 Feb: 9,271 accounts

  11. Institutional Market Share • PostBank largest share of 28.2%, ABSA next @ 26.9% • History shows that trends subject to competitive campaigning, e.g., single bank has opened on average 2,200 accounts every business day of April

  12. Profile of Mzansi Account- Holders

  13. Profile of Mzansi Account holders • Females still represent 54% of Mzansi Account holders • Large youth market – almost a third of account holders • Females between 25 and 54 represent almost 35% of account-holders • 90.4% Black, Coloured 4.7% (up from 2.6% in January)

  14. Provincial Distribution • Large concentration in Gauteng (29.8%%) and KwaZulu-Natal (17.5%)

  15. Banked Status & Account usage profile • 91.3% of Mzansi Account holders are new to their institutions. No indication of this trend changing • On average R 325 held on deposit in each Mzansi Account – this is up from R 280 in January indicating accounts being used more by savers • Total balances: R 325m • 82.8% of accounts used in last 30 days up from 75.1% end of January • 95% of accounts still have positive balances

  16. Transaction volumes • Increase in transactions per account holder • Withdrawals indicating accounts being used more regularly • Deposits decreasing due to take-up stabilising and fewer opening deposits being made • POS transactions still relatively low indicating banking needs primarily first order • Of concern rate of high transaction fees – 8.6%

  17. Next Phases • New features and functions • Progress with finding a minimum standard for a payment mechanism for Mzansi Account • Mzansi Money Transfer Product launched in Q3/2005 • Additional participants to join

  18. THANK YOU

  19. Contact Information • Colin Donian • Director: Mzansi Initiative • 082-456-7592

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