The latest report from the Centre for Social Impact Measuring Financial Exclusion in Australia has found that full and severe exclusion from financial services has grown by 1.6% since 2010, and now affects 2,995,000 adult Australians.
The Centre for Social Impact defines Financial Exclusion as “where individuals lack access to appropriate and affordable financial services and products – the key services and products are a transaction account, general insurance and a moderate amount of credit”.
It found that an alarming 17.2% of Australia’s adult population were either fully or severely excluded from financial services in 2011. However Indigenous consumers were affected to a much greater degree, with 43.1% of Indigenous respondents being either fully or severely excluded.
Along with this 39% of respondents did not have any credit products. As the report stated, many of the people from this group who said that they were financially excluded from credit services required immediate credit for everyday expenses, and that this need would most likely drive these people towards fringe providers such as payday lenders and Centerlink advance payments.
The report found that the cost of products was a major factor in exclusion from all financial services. The average cost for basic financial services was averaged at $1794 each year. This cost amounts to over 15% of yearly income for 12.7% of Australians, and is an impossible drain upon consumers who cannot afford to spare this expense.
The report was created for the NAB whose CEO Cameron Clyne was correct when he said in his foreword that “in a country with a banking system and economy as strong as ours, it is simply unacceptable that nearly three million Australians are financially excluded from affordable financial services”.