FinMark Trust released the results of its first FinScope Consumer Mauritius 2014 survey results on 3 October 2014. The FinScope Survey, developed by FinMark Trust, is a research tool to assess financial access in a country and to identify the constraints that prevent financial service providers from reaching the financially under- and unserved people. The FinScope Survey is a nationally representative survey of how individuals source their incomes and how they manage their financial lives. It also provides insight into attitudes and perceptions regarding financial products and services. FinScope Mauritius involved a range of stakeholders engaging in a comprehensive consultation process, thereby enriching the survey.

To date, FinScope Consumer Surveys have been conducted in 19 countries including Mauritius. The survey was carried out under the auspices of the Ministry of Finance and Economic Development (MOFED) and funded by FinMark Trust. The sampling frame and weighting of the data was conducted under the guidance of Statistics Mauritius.

The study was based on a nationally representative sample of 4000 adults who are 18 years or older. The sample is representative at national, urban/rural, and regional levels. Below are some of the highlights from the 2014 survey.

Levels of Financial inclusion in Mauritius

The study revealed that the level of financial inclusion is high in Mauritius, with only 10% of adults 18 years or older classified as financially excluded; that is they do not use any formal or informal financial product or service to manage their financial lives. This means that Mauritius has the highest level of financial inclusion in SADC, with 90% of adults having or using a formal or informal financial service.

In total, 85% of the adult population is banked, 49% use non-bank products and services and 26% use informal mechanisms to manage their finances. 88% of adults are classified as formally served and 2% as informally served. Only 1.2% of adults make use of bank accounts that are not registered in their names. Of those who are unbanked, the main barriers were insufficient money coming in (59%) and insufficient balance after paying for expenses (29%).

The level of financial inclusion is higher among males (94%) compared to females (86%). There is very little difference in overall inclusion levels of adults across urban (91%) and rural (90%) areas or between Rodrigues (87%) and the rest of Mauritius (90%).

High incidence of savings

The study found that 30% of adults in Mauritius do not save. 61% of adults are saving at the bank, a further 4% have other formal non-bank savings mechanisms, a further 2% rely on informal saving mechanisms such as savings groups, while 3% are saving at home only.

Credit and borrowing

The results show that in the 12 months preceding the survey, about half (52%) of adults in Mauritius claimed to have either borrowed money or taken goods on credit. 27% of adults borrowed money from a bank, a further 7% have formal non-bank credit, 9% used informal mechanisms such as money lenders, while 9% use friends and family only.

Insurance driven by motor vehicle and life insurance

Although the majority of adult Mauritians (75%) perceive insurance as a protection in case of problems, 62% of adults do not have any kind of financial product covering risk. About 2 in 5 (38%) adults have some financial product covering defined risk. Insurance cover is driven by motor vehicle (23%) and life insurance (20%). The barriers to insurance uptake are mainly related to affordability reasons, not needing it or never thinking about it. As far as the plans of Mauritian adults to meet non-defined risks are concerned, the two strategies mentioned for meeting expenses in old age were pension/old age grant from Government (63%) and use of own savings (37%).

Remittances low

Use of remittances in Mauritius is low, with only 6% of adults sending or receiving money. 2% of adults in Mauritius either sent or received money to or from people within Mauritius and 4% of adults sent or received money to or from people living outside of Mauritius.

Mobile money

Although about 84% adult Mauritians surveyed use mobile phones, only 2% are registered users of mobile money. Lack of enough information on mobile money (43%) is the major barrier identified by the survey .

Conclusion

Overall, the level of financial inclusion in Mauritius is high with Mauritius ranking first in the SADC region. It is worth mentioning that the level of financial inclusion is hampered by income regularity as most financial products are pegged on regularity of income. 15% of adults who show signs of over-indebtedness have credit.

The study reveals that 11% of the population have low financial literacy (e.g. awareness of financial products) and 21% have low financial skills (e.g. how to budget, keep records). 8% of adults are unable to maintain a minimum balance and around 52% play ‘games of chance’, which accounts for an estimated 3% of their budget. To this end, financial literacy/education campaigns could prove valuable to assist in the financial decision-making of adults. This signals future areas that need to be carefully managed by proper communication of the risks to these individuals.

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FinScope was launched in 2002 by the FinMark Trust. Its purpose is to establish credible benchmarks on the use of, and access to, financial services in South Africa. It is designed to highlight opportunities for innovation in products and delivery. The FinScope survey is a comprehensive and national representative study on financial inclusion, looking at how people source their income and manage their financial lives. It has been implemented in 19 countries (11 in SADC, 5 non-SADC Africa and 3 in Asia).