tenor and cost of borrowing were probed, as were reasons for not using formal intermediaries (including bribery: 27 per cent report having to pay a bribe to get a loan). Among the other financial questions was: type of insurance used. Not many household level control variables were mentioned in the study report, reliance being placed instead on ecological regression using village characteristics.

An important recent initiative is a suite of household surveys recently conducted by the Finmark Trust with partners in five countries of Southern Africa (Botswana, Lesotho, Namibia, South Africa and Swaziland) with broadly comparable questionnaires in the five countries.<sup>17</sup> In contrast to many other studies, the focus of the Southern Africa surveys has so far been less on the knotty question of access to credit, and much more on cost and other barriers to use of services access to most of which does not require satisfying creditworthiness tests. Close attention is paid not only to the range of alternative financial services (life and general insurance and payment technologies) but also the reasons provided by households as to why they did or did not use the services and as to problems with using them. As such, these surveys carry some of the flavor of market research to a greater extent than the others mentioned above. An interesting feature is the use of household psychology: values and attitudes (whether family or community oriented or materialistic; general optimism; connectedness) as predictors of financial service usage. In addition, financial discipline and risk management strategies were explored. For example, households were asked questions as to what resources they had drawn on to meet various emergencies and other spending needs, or to absorb investible windfalls. They were also asked about their knowledge of and attitudes to different financial institutions (for the former making explicit use of service provider names, e.g. Barclays, FNB). As with the other market-research relevant aspects, this presumably enhances the commercial value and points to a way of spreading the cost of such surveys.

Ingeniously, the researchers (Genesis/Finmark) attempted to calculate a single exclusion index for example by considering the proportion of the population which is likely to be excluded by virtue of any of several barriers or costs, specifically affordability of the service, regulation (e.g. anti-money laundering rules; limited right of women to open accounts without husband/father’s approval), eligibility (e.g. requirement to hold minimum balance, requirement to show payslip before opening account); service characteristics (queuing, need to fill forms, need to use complex technology); product features (interest rate, liquidity). Some of these are measured directly by survey response

> 17 <u>http://www.finscope.co.za/.  Sample sizes in the initial pilot surveys of the small countries carried out in</u> 2003 ranged from about 500 to 800; the South African pilot in 2002 had about 1000.  A full scale survey using census information for the sample frame, was mounted covering 3000 households in South Africa; this is being repeated in South Africa in 2004, and there is a full-scale survey in Botswana also in 2004. Interestingly, the countries surveyed in this suite have sharply varying proportions of “unbanked’ (in this case households without a savings account as a formal financial intermediary): Botswana 20 per cent; South Africa 49; Namibia 52; Swaziland 54; Lesotho 67.  In South Africa, over two-thirds of those without a bank account say this is because they have no job; only 13 per cent say they don’t need one or would prefer to use cash; interestingly one in seven had an account but no longer do – perhaps an especially high figure reflecting unique conditions in South Africa.  In the other four countries, the high minimum balance and the banks’ formal requirements (payslip etc) are cited as the main discouraging factors (Genesis, 2004).

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