Financial inclusion promotes the accessibility and usability of financial services and products for those who are un- and/or under-banked. Limited financial literacy impedes meaningful financial inclusion for many South Africans. The National Consumer Financial Education Strategy highlights the inability of consumers to evaluate the appropriateness of financial products in relation to personal circumstances: high levels of consumer debt, low saving rates, financial scams and limited knowledge of recourse mechanisms as some of the challenges that must be addressed. The strategy envisages a future in which:
* Young people are financially literate, responsible and want to improve their lives and that of their communities.
* Adults are financially adept, can avoid poverty traps, plan, invest and create wealth.
* The aged are financially secure, not victims of scams and fraud, and can control their finances.
The funding for education programmes in line with the strategy comes primarily from provisions in the Financial Sector Code, which requires all financial services firms to spend 0.4percent of their net profit after tax from retail business on consumer financial education.
This has unlocked significant resources for consumer financial education. In the banking industry alone, R153million was spent on consumer financial education last year. The initiatives covered school learners, out-of-school youth, tertiary education students in TVET colleges and universities, and workers. Teaching methods ranged from face-to-face instruction, radio, TV and other digital platforms.
The flagship initiative of the banking industry is the StarSaver programme, which is co-ordinated by the Banking Association South Africa. This programme involves financial services institutions providing financial education in schools with a focus on learners in Grade 7 to 9. The programme is aligned to the economic and management sciences curriculum and has been running for the past 11 years, reaching more than a million learners.
South Africa will have a unique opportunity to learn new ways to improve its financial education strategy when it hosts the fifth Child and Youth Finance International Summit in Joburg tomorrow and on Thursday, with the theme Economic citizenship and employment: a future for all.
Participant at the summit, Samke Ngubane, is a young South African who has transformed her life and circumstances through financial education.
She said: “When you have control over your finances, it helps you gain confidence, improves your health and gives you the courage to take tough decisions about your money and priorities."
Khulekani Mathe is the head of financial inclusion at the Banking Association South Africa.