South Africa’s most vulnerable consumers, those earning less than R3 000 a month, will be the beneficiaries next year of a R10-million financial literacy drive funded by the Life Office’s Association (LOA).
The LOA has been mandated by several of its members to spend R3.3-million on each of three different consumer education initiatives by the end of next year, in line with the Financial Sector Charter (FSC).
Lerato Mametse, Deputy Executive of the LOA, says that as a signatory to the FSC, the life industry made a commitment to apply 0.2% of post-tax operating profits every year in respect of consumer education. This amounts to a commitment of R25-million a year from the long-term insurance industry. Life companies can either fund their own consumer education drives, or contribute towards initiatives identified by the LOA.
She says the following companies contributed the R10-million to be used by the LOA for consumer education next year: ABSA Life, Assupol Life, Discovery Life, Hollard Life, Liberty Life, MS Life, Momentum Group, Nedgroup Life and Regent Life.
Mametse says the first project got underway in October this year and is a continuation of the LOA’s financial wellness programme for government employees. The programme is run by The Careways Group, which specialises in providing employee wellbeing services, including helping employees gain control of their finances.
Financial fitness for public servants
She says the financial wellness programme will take public servants through the essential tools of financial well being like budgeting, borrowing, saving and how to manage these effectively.
The first phase of the programme ran from March last year to August this year at a total cost of R2.6-million. During this period:
Mametse says while the first phase targeted all government employees earning R10 000 a month and less, the second phase is open exclusively to public servants earning less than R3 000 a month, as stipulated by the FSC.
In addition all course material will now be made available to participants in any of the 11 official languages when requested, while actual workshops will be presented in the dominant languages of the provinces in which they are held. Again, this is in line with FSC requirements.
As before, all workshop participants are also given free access to financial counsellors via a telecare service as well as debt counsellors approved by the National Credit Regulator. Statistics from the previous programme indicated that the majority of queries received by telecare consultants were in connection with over-indebtedness, black listings and debt advice.
Joint ventures
Mametse says the LOA has joined forces with the South African Insurance Association (SAIA) to implement community based consumer education workshops, with the support of the Labour and Community Constituencies in the FSC.
She says cooperating with other stakeholders in the financial services industry and taking guidance from the Labour and Community Constituencies ensures that consumer education initiatives reach the widest possible audience.
The joint project, known as Inzala (the Zulu word for seed), aims to educate some 35 000 people in communities in all nine provinces as identified by the FSC Labour and Community Constituencies. During the eight hour workshops, low income earners will be taught the basic principles of financial well being like budgeting, buying on credit responsibly, saving and how to manage these effectively.
Reaching out through the media
The LOA is launching a media based consumer education programme in February next year, targeting the country’s low income earners. Using radio and newspapers, consumers will be presented with easy to understand facts about life and disability insurance, funeral cover and consumer credit insurance.
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