LIFE AND STYLE
Wealth Gap Deepens in Mauritius as 80% of Savers Hold Less than Rs 100,000
A comprehensive report by the Mauritius Deposit Insurance Corporation (MDIC) for 2024–2025 has exposed a stark wealth disparity, revealing that over 80% of depositors in Mauritius have less than Rs 100,000 in their bank accounts.
While the banking sector appears robust—overseeing Rs 525.6 billion in total deposits across 2.7 million accounts—the wealth is heavily concentrated at the top.
A minority of 293,444 depositors, holding balances exceeding Rs 300,000, control a massive 86% of the total value of all deposits.
The Death of Long-Term Saving
For the majority of the population, the concept of saving has shifted from wealth accumulation to a “fragile and ephemeral” survival tactic.
Jayen Chellum, spokesperson for the Association des Consommateurs de l’île Maurice (ACIM), notes that for those on the minimum wage, saving is “almost impossible.”
“This isn’t long-term saving,” Mr Chellum stated. “It is just putting a little money aside to join both ends the following month. That money is ultimately absorbed by immediate expenses.”
The “Transactional” Bank Account
Economist Manisha Dookhony explains that the low balances do not necessarily indicate a total lack of resources, but rather a change in how bank accounts are used.
For many, the account is now merely a “management tool” to:
- Receive salaries and immediately pay bills.
- Fund family property projects or small investments.
- Repay debts, specifically hire-purchase agreements.
Social Reality: Living “Meal to Meal”
Social worker Antoinette Guillaume provides a grim look at the “crude reality” on the ground. She observes that even those earning above the minimum wage are struggling.
“Many families live day to day,” she said. “We often meet families with several children who struggle to feed them. They live from meal to meal.”
The report and stakeholders identify several “incompressible” expenses that prevent families from building a financial safety net:
- Child-related costs: Despite free schooling, the price of supplies, books, uniforms, and private lessons is rising.
- Essential Utilities: Rent, water, electricity, and transport.
- Healthcare: Costs associated with private clinics.
The Vicious Cycle of Debt
The absence of a financial reserve leaves households vulnerable to “the slightest unforeseen event.”
Mr Chellum warned that a lack of savings inevitably pushes families toward borrowing, leading many into a “vicious cycle of indebtedness.”
A Roadmap to Recovery
To address this systemic pressure, the experts have proposed a three-pronged strategy:
- Financial Education: Ms Dookhony argues for reinforced education providing “concrete advice” on how to invest and save based on individual means.
- Spending Culture: ACIM advocates for teaching a “culture of saving” from an early age, helping citizens distinguish between “true necessities and superfluous spending.”
- Government Protection: Mr Chellum insists the state must intervene to “control food prices” and prevent “abuses in essential services” like private clinics.
The MDIC report concludes that banks continue to dominate the savings landscape, holding over Rs 492 billion, far ahead of other financial institutions.
However, for the average Mauritian, the bank account has become a revolving door where money enters and exits almost instantly.
Source: Defi Media
