Sassa cards empower women
Poor South Africans have experienced rapid financial inclusion because of the now controversial South African Social Security Agency (Sassa) bank card. From 2004 to 2014 the proportion of the population with bank accounts increased from less than half to 75%.
In 2012 alone, 10-million social-grant recipients were given bank cards and accounts, to make it easier to receive payments from Sassa. This was a massive, sudden expansion in the provision of financial services. If international experience is a predictor, the Sassa cards should have had positive effects.
But in hindsight the operation of this programme under the auspices of Cash Paymaster Services (CPS) has been embroiled in political controversy and allegations of bad practice.
The handover of this function to the South African Post Office has been slow and dogged by legal battles.
This has threatened to halt payments of social grants to a large group among the 17million recipients. But the massive financial inclusion has also negatively affected households as access to bank accounts allowed them to become more indebted.
Investigations suggest that CPS affiliates aggressively targeted cardholders with loans that were not affordable and the repayments were automatically deducted from incoming money from Sassa.
Effectively, many grant recipients were left with little to nothing at the beginning of the month.
This is an alarming situation in the context of already high household debt levels and declining savings. Financial inclusion can have unwanted consequences.
New research by Research on Socio-Economic Policy at the economics department of Stellenbosch University focuses on some unintended benefits of the Sassa card. The programme facilitated payment from the government to poor people and changed the way households functioned. The findings reveal that the Sassa card helped on multiple fronts.
Most of the new bank accounts have been opened by women. Internationally, women have lagged behind men in access to financial services and it is the same in SA.
Social grants have inadvertently changed this by providing the poorest in society with financial services. About 12-million of the 17-million social grants are child support grants paid to children’s caregivers, who are still predominantly women. A large proportion of Sassa cards went to women, and the bank accounts they opened have profound implications for how poor women transact and integrate into economic life.
The data also show poor women who report obtaining a new bank account between 2004 and 2014 gained decisionmaking power in their homes. They were more likely to become the person in the household who decides about day-to-day purchases or how cash is spent. No similar change occurred among men or women who already had bank accounts, so the shift can be attributed to financial inclusion.
Grants paid in cash are easily spent by any member of the household, regardless of the intended recipient.
But grants paid into bank accounts are protected by PINs and controlled by recipients, so more women gained financial independence and could exercise control over money.
Women’s autonomy over their money often translates into better outcomes for children. All in all, financial inclusion has altered the gender balance in poor South African households.
However, the benefits for women extend beyond their homes. The gains in autonomy also allow women to enter the labour market. Over the past five decades the labour force across the world has undergone a shift to “feminisation”. SA is no exception: women have become increasingly independent and entered the workplace in large numbers since the 1960s.
The research shows that financial autonomy plays a role in this. Women who are able to make decisions over household resources are also more likely to have a job or look for one. The findings rule out the possibility that jobs are a prerequisite to gain this control; instead decision-making power over cash is a precursor to decisions about jobs.
Women who gained access to bank accounts leveraged their financial autonomy to integrate into the world of work. Impacts are strongest in households that are dominated by men.
Where women are a minority, financial independence strengthens their voice; they are able to overcome traditional gender norms and look for jobs. Sassa cards have therefore had the unintended consequence of empowering women.
The linkages between financial inclusion, gender empowerment and being part of the labour market are clear. While Sassa cards have been politically controversial and coupled with financial hardship for some, others — especially women — have stood to gain relative to other family members and in the world of work more broadly.
Financial exclusion may not be the only obstacle to women in the marketplace, but it is one influential component to realising gender equality inside poor households and in the workplace.