- Understand the importance of knowing your credit score and how valuable it is in the first steps to improve your financial health.
- To GET credit, you first have to get credit (meaning, understand it). The starting point is to appreciate the different types of credit and whether they may be appropriate for you.
- Don't get caught out by "keeping up with the Joneses" and dropping big bucks to purchase items outside of your means.
- Consistently practice financial discipline, including having honest conversations with family members and friends about your financial aspirations and challenges.
November is National Entrepreneurship Month. We speak to entrepreneur, author and professional speaker Vusi Thembekwayo about the entrepreneurial spirit in South Africa.
According to Thembekwayo, "The only way to transform the South African economy is to broaden economic activity."
While filming a recent Capitec TV commercial on taking credit for the right reasons, Thembekwayo shared his views on credit as a tool for fostering economic growth.
"I may be a plumber that needs to get a better bakkie. Credit creates the opportunity for me to do that and in turn grow my business. We need to give people access to credit for the right reasons. It can't be about consumption debt but rather productive debt."
South Africa's entrepreneurial spirit
As part of a recent online survey by Capitec to gauge consumers' "credit literacy", which saw more than 5 300 responses, the use of debt for productive reasons was found to be a top priority amongst South Africans. The most popular answer to the question "What would you do with a R100 000 loan?" was "Start a business" (40%), followed by "Improve my home/apartment" (24%), "Consolidate debt" (20%) and "Put a deposit on a home" (16%).
Francois Viviers, Executive: Marketing and Communications at Capitec Bank, had the following to say about the findings: " The results are encouraging as they show that the South African entrepreneurial spirit is alive and well. Credit is an important tool that has enabled many South Africans to breathe life into their entrepreneurial ideas. Our current Rethink Credit campaign is all about this, taking credit for the right reasons and realising responsible dreams."
South Africans: "Box above our weight"
Thembekwayo continued his commentary by sharing his views on South Africa: "South Africans must never lose heart of what our identity truly is…We always do better when we are together."
Referencing actress Charlize Theron, athlete Wayde van Niekerk and comedian Trevor Noah he says: " As South Africans, we box above our weight…that's what it means to be a South African. We take a girl from Benoni and she gets an Oscar. We take a boy from the Free State and he breaks Michael Johnson's 400-metre record. We take a kid from Soweto to host a show in New York and he becomes a global sensation."
An inspirational example of someone that used responsible credit to box above their weight, indirectly stimulating the economy, is Tshegofatso Makgabutlane.
Struggling with the frustrations of public transport, Makgabutlane used her savings as well as a loan from Capitec to purchase a vehicle. She was able to pay cash at the dealership, which allowed her to get a discount on the purchase price. Her new wheels enabled her to look for work in the nearby town of Potchefstroom. Her application for a job at North West University was successful and she is now a Higher Degrees Administrator.
Four tips to using credit for the right reasons
* This article was published in partnership with Capitec.