Financial Inclusion in Rural South Africa: A Qualitative Approach

Round 1

Reviewer 1 Report

The findings proposed by the authors indicate that supply-side factors such as distance from the service delivery point and high transaction costs are important in encouraging the use of financial services in rural areas. The authors found that demand-side factors including lack of formal employment, low and irregular income, financial illiteracy and perception of risk and trust play a more significant role. 

The paper calls for an in-depth literature study on financial and risk management in regions other than rural South Africa. A comparison should be made with reports from highly cited journals registered in the Web of Knowledge and in Scopus on risk and financial management in rural regions. Particularly the deficiency can be seen in the description of Table 3. Are the authors sure that the values in the verse (in the row) starting with FG9 are proportionally appropriate. I would kindly encourage you to expand the description of the methodology and to better describe based on the literature. 

It is a correct observation that the distance from the place of service increases the transaction costs associated with bank accounts and discourages their use. Also, it is a fact that technology is an important alternative for the rural population due to their geographical exclusion. The legal barrier to the development of mobile banking is also worth pointing out. However, these are not typically financial or risk-related topics. 

The authors argue that financial inclusion efforts have resulted in a rapid increase in access to financial services but the use of these financial services is not developing at the same pace, especially in rural areas. The authors analysed the factors that have caused the use of financial services to lag behind access to financial services, using a qualitative approach. The authors collected data in two predominantly rural South African provinces using focus group discussions, but this does not mean that the literature is meant to be narrow. Quite the opposite. 

I suggest that the authors' observation that creating an enabling environment for mobile money could overcome proximity barriers and lead to better integration of rural communities should be more strongly substantiated by the literature reports and discussed. 

The authors also noted that a lack of knowledge about how financial services work may also explain the high level of distrust of banking expressed by the participants in the study. Here I recommend attention to works such as Dziuba, S. (2021) 'The Use of the Internet by Older Adults in Poland. Universal Access in the Information Society 20.1: 171-178, Web. Universal Access in the Information Society, where there are analogous difficulties in the European environment.

The authors rightly note that the literature documents that lack of trust sometimes leads low-income users to use informal services because of the personal and community trust that is evident in such services. Bem, A. (2015) 'Hospital Profitability vs. Selected Healthcare System Indicators'. Central European Conference in Finance and Economics, showed how the impact of rural contions of rural areas that financial literacy increases the uptake and use of tools by hospitals operating in rural areas. 

The authors' focus on the fact that risk management culture is influenced by bank selection criteria favouring those with formal employment and stable income is correct. People with a certain profile prevail in rural communities. And this profile is seen universally around the world.

Author Response

Thank you for taking the time to review our paper. Your comments have helped to strengthen the paper. Our point by point responses are in the attached file.

Author Response File: Author Response.pdf

Reviewer 2 Report

 

1.      Originality: The topic of financial inclusion is an area that has been around for a long time and I think its application to the South African region is originality. The author's in-depth study of financial inclusion in this particular region is something that makes a contribution.

2.      Relationship to Literature: The application of financial inclusion in rural areas has been fully introduced in this article, and I think it has financial implications for the South African region, so it is a good starting point for the state of financial inclusion in rural South Africa.

3.      Methodology: Although the research methodology in this article is not very innovative, it is very practical and detailed in documenting the research process and how the information was used to understand the use of financial inclusion in rural South Africa, so I think it is in line with scientific steps.

4.      Results: The results of the study highlight rural South Africans' perceptions of financial inclusion, which will provide a clearer picture of the true state of affairs in a given area.

5.      Implications for research, practice and/or society: The research theme, even though it is centered on financial inclusion in rural South Africa, will be instructive for other parts of the world with similar geographic and economic environments, and I think the contribution of the research is that it looks at what financial inclusion looks like in non-mainstream areas, which is a very good thing.

6.      Quality of Communication: The wording of this article is very easy to understand, and it also has the meaning of academic communication. I think this article is a combination of theory and practice, and it is a meaningful and good academic work.

 

Comments for author File: Comments.pdf

Author Response

Thank you for reading through our paper. your comments are highly appreciated

Reviewer 3 Report

Dear authors,

Please find my observations below:

Please add your affiliations in the draft.

Carefully format the manuscript according to journal requirements. You did not use the new template of the journal.

Format reference according to journal requirements.

Please expand the conclusions section, it is insufficient. Include here some study limitations.

How did you analyze qualitative data? Please state this in the manuscript. 

Analyses are too scarce in your study. Please elaborate more on data and include additional analyses. 

The literature review part could be extended by including sources like:

1.      Batrancea, L., Nichita, A., Batrancea I., Roux Valentini Coelho Cesar A. M., Forte D. (2018), in the book : Sustainability and Social Responsibility of Accountability Reporting Systems. A Global Approach, Series: Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, Editors: Çalıyurt Kıymet Tunca, Said Roshima, Chapter: Sustainable Tax Behavior on Future and Current Emerging Markets: The Case of Romania and Brazil, pp. 141-158, ISBN: 978-981-10-3210-3, Springer

2.      Larissa Batrancea, Malar Maran Rathnaswamy, Ioan Batrancea, Anca Nichita, Mircea-Iosif Rus, Horia Tulai, Gheorghe Fatacean, Ema Speranta Masca, Ioan Dan Morar (2020) Adjusted net savings of CEE and Baltic nations in the context of sustainable economic growth: A panel data analysis, Journal of Risk and Financial Management, 13 (234).

 

Author Response

Your comments on the paper are highly appreciated. They have helped to improve the paper. We have responded to each point and attached the document which itemises our responses

Author Response File: Author Response.pdf

Round 2

Reviewer 3 Report

Dear authors,

The manuscript is considerably revised as compared to the previous version. Congratulations for the effort.