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FINANCIAL SERVICES BOARD
FINANCIAL LITERACY AS A MEANS TO FINANCIAL INCLUSION: OECD-RBI FINANCIAL EDUCATION WORKSHOP, BANGALORE, INDIA 22 March 2010
Olivia Davids
Promoting an informed nation
Introduction The FSB is a unique independent institution established by The
Financial Services Board Act No. 97 of 1990, to oversee primarily the non-banking financial services industry in South Africa in the public interest
In 2000 the Act was amended to mandate the FSB to: “Promote programmes and initiatives by financial institutions and bodies representing the financial services industry to inform and educate users and potential users of financial products and services”.
The FSB developed a strategy for Consumer Financial Education with a vision “to see all South Africans manage their personal and family financial affairs soundly and irresponsible financial services providers not supported but reported.”
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Social situation in South Africa
Vast gap still exists between rich & poor, urban & rural, based on historical inequities
4% of the population earns almost 40% of South Africa’s total personal income
75% of South Africans earn less than US $7,000 per annum
University of South Africa (UNISA): Bureau of Market Research – Report released February 2010
Description of the financially excluded population in SA
Form the majority of the population Are largely part of the informal economy Have little or no knowledge of financial
management Are the primary target for financial education
initiatives in South Africa by the FSB
Credit standing of consumers
National Credit Regulator Sept 2009
Consumers in good standing
National Credit Regulator Sept 2009
More financial statistics… 26% of SA adults are financially excluded and do not
use formal or informal financial products 10% of the population rely on informal financial
services such as savings clubs and informal moneylenders – mostly unregistered
72% of adults say they are not saving 45% of adults have some financial product that covers
defined risks such as life, burial & health 28% of adults get money from friends and family as a
source of income 25% of adults get an income from government social
grantsFinScope South Africa 2009
Problems faced by consumers…
Consumers are not aware that: Some funeral insurance policies sold are not underwritten Some funeral parlors are not registered with the FSB Some insurers take unauthorised upfront deductions from
consumers Consumers fall prey to pyramid schemes which are illegal Service providers keep consumers’ bank cards with their pin
numbers and/or their identity documents - illegal Consumers could be negatively listed without being notified Investment companies that sell shares may not always be
licensed by the FSB
FSB is implementing a targeted financial education programme
Budgeting Saving Insurance Financial rights & responsibilities Using formal financial services & products
Financial education programmes are launched through… Community, workplace & other workshops Schools & educational events Print media Radio, TV & DVD programmes Taxi-ranks & shopping malls Booklets & brochures
Workshops
Messages: money management, debt, credit, short-term insurance and the rights and responsibilities of consumers
Workshops 200 workshops + 5000
participants Workshops were
completed in December 2009
Media campaigns Weekly programmes for 6 months
Others by invitation FSB staff, ombudsmen and
other Financial sector institutions interviewed.
Taxi ranksCommuter education
Aimed at commuters at mini bus taxi ranks, train stations throughout SA
Huge TV screens at ranks, broadcasts onto train stations, into taxis and interactive education at kiosks
Messages: money management, debt, credit, short-term insurance and the rights and responsibilities of consumers
Stokvel TV(Informal savings club)
Project started in June and completed in November 2009.
6 inserts on: Budgeting Saving Debt management Long term Insurance Short term Insurance Consumer rights and
responsibilities A3 page in Daily Sun monthly for 6
months
Shopping malls Providing financial information
to shoppers in a more receptive environment
Schools
“Managing your money”
Mathematical Literacy resource for Grades 10 & 11
Funded by FSB and SAIA Reviewed by DOE – FET Schools Facilitated 34 workshops in 9 provinces Very well received Funds approved for Grade 12 development
“Money in action”
Grade R – 12 EMS, Math Lit., Life Orientation CD- ROM based 4 Stand-alone booklets per phase
and band Developed by e-Learning
Laboratory 60 workshops in 9 provinces Excellent teaching tool Includes voice-overs
Future outlook for FSB
Launch National Strategy for Consumer Financial Education in South Africa that will:
Play a stronger role in coordinating financial education
Strengthen the role of industry in financial education
Lessons learned in implementing financial education programmes Multi-pronged approach In SA, face-to-face workshops have proved to be
effective Monitoring and evaluation systems always in place at all
phases of implementation 4 / 8 of FSB’s Consumer Education Department are
qualified educators with experience in all levels of formal education as well as adult education
All material is neutral with no marketing or mention of specific brands
Some lessons learned in implementing school programmesThe following contributed towards the successful
implementation of consumer education in schools:
Obtained the support of the DOE Financial education was integrated into the
curriculum Used practicing teachers to develop the
teaching resources Ran workshops for teachers and education
officials on how to use the resources
