Resumo

ISMAILA, Bouba; GAMEDE, Vangeli  e  OKEKE-UZODIKE, Obianuju. Causes of the low penetration rate in the South African co-operative financial institution sector: A consumer perspective. JCMAN [online]. 2022, vol.19, n.1, pp.30-56. ISSN 1815-7440.  http://dx.doi.org/10.35683/jcm20138.136.

PURPOSE OF THE STUDY: This study sought to investigate the possible reasons for the low penetration rate within the South African Co-operative financial sector, focusing on consumer knowledge and their engagement with co operative financial institutions, as well as their awareness of the entrepreneurial and innovative activity of co operative financial institutions (CFIs). The study is significant because the co-operative financial institution sector in South Africa is very small compared to other African countries, with a penetration rate of just 0.1 percent despite the important role that financial co-operatives play in poverty reduction and financial inclusion, which is recognised by governments worldwide. Surprisingly, no study has been conducted in South Africa in an attempt to find the reason behind this sector's very low penetration rateDESIGN/METHODOLOGY/APPROACH: The study used a quantitative design; and a structured questionnaire was used to collect data from 303 participants around the City of Tshwane. The SPSS software package was used to analyse data. The tests included descriptive statistics, Chi-square goodness-of-fit-test, binomial test, one sample t-test, and factor analysisFINDINGS: The study found that a significant majority of the respondents did not know about CFIs or the services they offer. This may explain the low penetration rate of the industryRECOMMENDATIONS/VALUE: The study serves as the basis for a wider study in other regions of the country, and even internationally. It is recommended that research across the country, with a representative sample, be considered in future studies in order to generalise the findings to the entire countryMANAGERIAL IMPLICATIONS: The implication of this finding is that the sector's top management needs to adapt and implement a systematic programme to try and close that knowledge and awareness gap; thereby enabling them to reach a larger number of consumers. Other stakeholders, such as government and NGOs, should also review their approach to assisting co-operatives in order to be more effectiveJEL CLASSIFICATION: G21

Palavras-chave : Co-operatives; co-operative financial institutions; corporate social responsibility strategies; marketing strategies; offensive strategies; penetration rate.

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