News

How do grant beneficiaries participate in financial markets?

9 March 2010

The 14 million people who receive social grants usually make intelligent choices on how to spend their money, according to new research conducted for Finmark Trust, a lobby group which aims to find ways of extending financial services to the poor.

Though they save and borrow more, they use formal financial services, like banks or micro lenders, less than people who don’t receive grants.

While the Finmark report makes the case for social grants, it also underlines the inappropriate nature of formal banking institutions for the poor.  Interestingly, Actuary Rob Rusconi, who contributed to the research for Finmark, says that alternative channels such as cellphone banking are clearly the way for the future.

Read more about the findings of the research at Financial Mail.