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FSCA Financial Literacy Speech Competition

The Financial Services Conduct Authority (FSCA), in conjunction with the Financial Planning Institute (FPI) and in collaboration with the nine provincial departments of education, has implemented the FSCA Financial Literacy Speech Competition for grade 11 learners. The objective is to promote financial literacy on topics like budgeting, savings, investment and consumer rights in schools.

Is it possible to save in difficult times?

According to the S&P Global Financial Literacy Survey – the world’s largest global measurement of financial literacy – South Africa’s financial literacy stands at 42% (the global average is 33%). This 2020 article provides some tips on improving financial knowledge.

Ted Talk: If You Leave your Children One Thing, Make it This

In this Ted Talk, Robert Gardiner discusses the importance of providing children with financial education. He believes that, in order to be effective,  the teaching of financial education needs to be modernised, simplified, and should start at an early age.

Gugu Sidaki: Knowledge is Power to Save and Build Wealth

"Going by current data, South African households don't really save much. SA's household savings ratio refers to the income saved by households during a certain period and is calculated and published by the South African Reserve Bank. At the end of 2019, our savings ratio was -0.20%. That means, as a country, we spent more money than we earned and didn't save at all. South Africans also use debt to cope with extreme financial pressures, which is reflected in the continued rise in credit card advances and the fact that we spent 72.8% of our gross income in 2019 to service debt, according to the central bank.

High levels of indebtedness can be directly linked to low levels of financial literacy. Financial literacy is your ability to make rational decisions when it comes to spending, saving, borrowing and investing. A lot of work has gone into understanding global financial literacy levels and how they affect financial behaviour, which in turn determines your financial situation as a consumer. SA has been part of a number of different global surveys to determine general financial literacy levels."

Read more on Sowetan Live


Financial Literacy is the Key to Moving Forward in a Post-Covid Economy

"Financial literacy has long been an issue in South Africa. Developing a national savings culture, ensuring consumers understand how to use credit responsibly and banking the un-banked are just a few of the top line issues we have fought to address since democracy, with varying degrees of success. However, much work still needs to be done – especially as we enter the post Covid-19 ‘new normal’.

Experts agree that the economic downturn sparked by Covid-19 is likely to see South Africa experience significant job losses. Within this context, managing debt is going to be difficult for many South Africans. "

Read more on IOL

Ecobank Group and JA Africa Partner to Promote Financial Literacy Skills Among Africa’s Youth

"Junior Achievement (JA) Africa and Ecobank Group (www.Ecobank.com) announce their new partnership- “Banking on Africa’s Youth.” The partnership will undertake a campaign which will tap into JA’s vast online community, comprising over one million young social media followers spread across Africa. It will educate and mobilize over 600,000+ young people with financial literacy knowledge, as part of Ecobank’s Junior Savers initiative which in part seeks to grow financial inclusion for young Africans using Ecobank’s mobile/digital resources."

Read more on allafrica.com

Youth Month Highlights the Need for Expanded Financial Literacy

"It’s imperative that young South Africans are taught how to take advantage of new, technology-driven financial services offerings, in addition to receiving basic financial literacy education...

A significant percentage of South Africans in full time employment are unable to protect themselves against the risk of unexpected events by taking out insurance policies and are also increasingly struggling to save money to guard against a future rainy day.

According to December 2019 article in BusinessTech, National Credit Regulator (NCR) statistics show that 84% of South Africans who earn R15,000 a month or more have some form of debt – with unsecured loans and credit cards the fastest-growing types of debt. The same article cites a survey by the Debt Counsellors Association of South Africa of consumers with bad debt. The survey found that many are borrowing for daily necessities such as food and transport, while also cutting back on medical aid and insurance policies."

Read more on FA News


Financial Literacy Crucial Skill for South African Youth

"Financial literacy is a crucial skill in every stage of life, more so for young people today. This as at a time when the world economy is struggling with the arrival of COVID-19, bringing depression across world economies. It is no secret that South Africa is battling the three challenges of unemployment, inequality and poverty.

Despite the myriad challenges faced by the country, the perseverance of young people against many challenges, including academic exclusion, has led many to start their own innovative businesses while others have gone into their dream jobs. While South African youth continue to break barriers and go into fields that our grandparents could only dream of, it is equally important to have a healthy relationship with money."

Read more on Devdiscourse

Putting South Africans on the Road to Financial Literacy and Wellness

 - By Charlene Lackay, Group CSI Manager at Momentum Metropolitan Holdings

"It’s no secret that South Africa has a financial literacy challenge. It’s been well-documented, and the statistics back it up: a report by the Southern Africa Labour and Development Research Unit has found that only 37.6 percent of the bottom 90 percent of South Africa’s population is financially literate.

The study revealed some interesting insights into the state of financial literacy in the country, not least of which is that there are large differences in financial literacy by household income and wealth. For instance, 63.3 percent of South Africans in households with income of more than R30 000 per month are financially literate in comparison to only 34.1 percent in households with less than R5 000 income per month."

Read more in Money Marketing

Learning in Lockdown: Metropolitan’s Free, Financial Literacy Short Course

'Yima, angizwa kahle, what do you mean there’s no money for the tombstone?” Baba Majola pressed the phone closer to his ear to hear what the woman at the insurance company was telling him.

“But … but we paid. I thought the policy covered everything. Surely the tombstone was part of the package? Do you know we used all our savings on that policy?”

So begins ‘Moving up with the Majolas, revealing a very important lesson from the get-go; life has a way of delivering unexpected financial knocks that may derail all of our best-laid plans.

This engaging tale of the Majolas doubles as a financial literacy course sponsored by financial services provider Metropolitan and hosted on FunDza; an online literacy portal dedicated to helping South Africans better their reading, writing and learning skills.

Says Claire Klassen, Group CSI Consumer Financial Education Specialist at Momentum Metropolitan, “To help South Africans productively pass the time while ‘self-isolating’ and ‘social distancing’, Metropolitan is running its new financial literacy course from 9 April – 30 June 2020, encouraging individuals to use the opportunity to brush up on their financial knowledge.”'

Read more on Social-TV.co.za

Here's How to Empower School Children With Financial Management Skills

"Good financial health may be hard to achieve, but it is not impossible, especially if people are taught how to manage their money from a young age. With this in mind, the Consumer Financial Education Foundation (Confef) and Ithala SOC Limited have started teaching schoolchildren how to better manage their finances through a newly-launched financial literacy programme called MoneyTalks.

Ithala SOC Limited is an entity of Ithala Development Finance Corporation, while Confef is a non-profit organisation registered with the Department of Social Development."

Read more on Sowetan Live

Lack of Financial Education is a Global Issue. Here’s How to Fix It

"Compound interest. Credit rating. Budgeting. These are just a few financial topics that most of the world doesn’t understand. Why? Because financial education is lacking, leaving people around the world struggling to understand why their credit card interest is so high and they can’t afford the lifestyle they have dreamed of since they were young.

There is no single entity to blame for a lack of global financial education. It is up to everyone: parents, schools, and governments, to pitch in and teach the next generation how to properly handle their finances. And for adults, financial education could be the way to get out from under seemingly insurmountable debt and back to a financial life above water."

Read more on bondora.com

Opinion: Financial Literacy Apps Are More Important Than You Might Think

"Imagine that you have a savings account with an interest rate of 1% per year, while inflation annually is running at 2%. After one year, with the money in this account, would you be able to buy more than you could today, less or exactly the same? 

If you guessed that your money would be worth less than it did a year ago, you join the 64 % of Americans who answered this question correctly. This information emerged out of a pioneering study — designed by economists Annamaria Lusardi and Olivia Mitchell — measuring financial literacy levels in the United States in 2018. These economists discovered that only 30% of Americans were able to correctly answer all three of their questions. Low levels of financial literacy were also prevalent in developed markets like Germany, the Netherlands, Sweden, Italy, Japan, and New Zealand. 

In South Africa last year, researchers, who have developed their own index, found that below-average financial literacy is common among women, young adults, high-school dropouts, the unemployed, and people living in rural areas. So, what is financial literacy and why is it so important? Lusardi and Mitchell define it as knowledge about a few but fundamental financial concepts, while the Organisation for Economic Co-operation and Development (OECD) says financial literacy also requires having the skills and motivation to make effective decisions."

Read more on IOL

Are women worse affected by financial illiteracy?

"Behavioural scientist Mavis Ureke believes that South African women are worst affected by the country’s high levels of financial illiteracy. Speaking during Women’s Month (August 2019), Ureke discussed the low standard of financial education in South Africa, the financial difficulties many citizens face as a result, and the disproportionate impact that low financial literacy has on the Rainbow nation’s women."

 Read more in the Maravi Post

Bonga Khumalo on Youth Financial Literacy

SABC chats to Bonga Khumalo from Junior Achievement about the high unemployment rate amongst South Africa's youth, and the drive to get them more financially literate.

[Analysis] Inside the new way of measuring poverty in South Africa

There’s more to understanding a country’s poverty levels than merely calculating how much or how little individuals earn. That’s why a method called the multidimensional poverty index was introduced globally in 2011.

The multidimensional poverty index reflects aggregate levels derived from a number of socioeconomic indicators. These include education, health, standard of living and labour market activity. It unveiled new insights about the nature of poverty around the world.

South Africa had been watching with interest. In 2014, Statistics South Africa adopted the multidimensional poverty index into understanding the nature of the country’s poverty. The move produced the South African multidimensional poverty index (SAMPI).

Before this, the picture of the country’s poverty was mainly informed by the money-metric approach, which examines the proportion of the population with income below the minimum level required for survival (poverty line).

Read more in EWN

Steps millennials should take to secure financial future

I know what you’re thinking – yet another lecture on how millennials need to save more. Before you roll your eyes and move on, hear me out. Do you want to be working for the rest of your life? Until the day you die? Probably not. But even if the answer is ‘yes’, a consideration is whether you will be able to work for the rest of your life?

But if the answer is a resounding ‘no’, you need to start saving. Traditional retirement schemes (those that pay a defined benefit for life) are under strain as life expectancies continue to increase far beyond what they were designed to pay for.

If you have a retirement savings account – congratulations! Not everyone does, unfortunately. But how much do you need to be financially secure in old age? And are you saving enough? This is one of the areas we address in our new white paper, How We Can Save (for) Our Future.

Read more in Eyewitness News

Banks must catch 'em when they're young

Millennials use apps to buy transport, food, accommodation, fashion and beauty, and consequently, expect the same technology-driven convenience when it comes to customer service and communication from their bank.

This market, aged 21-37 in 2018, represents 14-million consumers or 27% of the South African population, and is arguably the most dynamic and prominent banking consumer base out there. Millennial consumers are the dominant force in the marketplace, wielding 55% spending power worth over R100bn per annum – more spending power than any generation before them. We need to fit in with them, not the other way around.

Read more in BizCommunity

SA movie teaches learners financial literacy

South African high school learners this weekend got an opportunity to learn about the pitfalls of improper spending through an innovative approach using a locally produced financial literacy movie entitled "One Way to Graceland".

The 80-minute movie explains financial management in a manner that resonates with young people. More than 15,000 learners in Grades 9,10,11 and 12 have been given the opportunity to gain crucial financial skills through the film, produced under the auspices of national youth financial literacy programme, Smartbucks.

Read more in IOL Business Report

Changes on the cards for which South Africans could have their debt written off

The contentious National Credit Amendment Bill has been the topic of much debate in recent months, and is expected to have a significant impact on the lives of thousands of ordinary South Africans as well as large parts of the finance and banking sectors because of the wide-scale debt relief it will provide.

Originally the proposed bill made provision for debt intervention for consumers earning a maximum of R7,500 per month and with less than R50,000 in unsecured debt.

“If the National Credit Regulator is of the view that the applicant requires assistance, a single member of the National Credit Tribunal can suspend all qualifying credit agreements in part or in full for a period of 12 months,” explained Eugene Bester of law firm Cliffe Dekker Hofmeyr.

Read more in Business Tech

Financial literacy is the key to financial inclusion

Regardless of economic circumstances, geographical location or level of formal education, everyone deserves equal access to financial products and services that can improve their current financial knowledge, daily habits and future opportunities. Financial literacy is key for this level of inclusivity to be realised.

This is according to Peter Tshiguvho, CEO of Metropolitan Retail, who notes that over-indebtedness impacts consumers at all income levels and, as more people are brought into the formal economy, educating them on the financial skills they need to effectively manage their finances is ever more important.

The World Bank defines financial inclusion as individuals and businesses having access to useful and affordable financial products and services that meet their needs and are delivered in a responsible and sustainable way.

Tshiguvho says, “An important contributing factor when it comes to promoting financial inclusion is improving the financial situation of the greater population. This is being addressed by government as they make strides to free up public funds for development in sectors such as healthcare and education - by tackling cases of collusion, bribery and general maladministration. However, government is not the only party that can play a role here.”

Read more in fanews