South Africa’s financial literacy challenge
On Tuesday 7 October the South African Insurance Association (SAIA) reported back on the insurance industry’s consumer education initiatives as implemented in the 2007/2008 year. Funds for these projects were “pooled voluntarily by SAIA members in terms of their 0.2% [of profits] commitment to consumer education in the financial services arena.” This ensured that SAIA had more than R8.552 million to apply to its various approved projects. SAIA thanked its member organisations for their contributions. And they also thanked the Financial Services Board (FSB) and the Life Offices’ Association (LOA), partners in the education initiative, for their ongoing support. These organisations added R2.032 million and R4.002 million respectively.
During the presentation we learnt that one of the biggest challenges in running financial literacy programmes is the measurement of outcomes. SAIA Manager of Image & Reputation, Vivienne Pearson, says partners in the initiative were committed to finding ways to meet this challenge. Accurate measurement of programme impacts would aid decisions in the best use of the limited funds available.
2007 Projects hit the mark
SAIA chairman Ronnie Napier says that “Financial literacy has received growing attention in both the developed and developing worlds in recent times.” He says that financial literacy is important in assisting individuals at all levels to make sensible and “informed decisions about their finances.” That’s why SAIA (with various partners) has been trying to uplift communities with its financial literacy projects over the last four years.
A number of projects were successfully implemented in the 2007/2008 year. Pearson summarised the five main projects as follows:
Project 1: 23 088 individuals were educated through the Inzala community workshop project. This joint initiative between SAIA and the LOA is conducted as a day-long financial education workshop.
Project 2 and 3: The FSB partnered with SAIA in two “complementary awareness projects.” The first awareness project involved a commuter financial literacy programme implemented at taxi ranks (and on taxis) and train stations by Comutanet. The second project took the form of ‘theatre’ productions at shopping centres and strip malls. These shows were conducted by Provantage.
Project 4 and 5: Two resource projects were also implemented with the assistance of the FSB. Product provider Bright Media assisted in creating a teacher development project in Mathematics Literacy in accordance with the National Curriculum Statement. 10 000 resource files were distributed to schools and 1 763 teachers trained at 37 workshops. This project was again supported by the FSB. And a new resource project will assist teachers and learners from grade 0 to 9 in a new subject, Economic Management Services.
Consumer education is an extension of consumer protection
During the keynote address, Gerry Anderson of the FSB pointed out that financial literacy was one of the key weapons in the fight against financial abuses. He noted that “consumer authorities are realising that consumer protection is very important – perhaps even one of the reasons for their existence.” An educated financial consumer is less likely to fall victim to the ranges of abuses prevalent in the financial services industry. That’s why the FSB continues to support the SAIA financial literacy initiatives. Anderson believes that the relationship between SAIA, the LOA and the FSB is “a good example to show other industry bodies what can be done if we work together!”
Anderson agreed that a key challenge in financial services education was how to measure the outcomes. As such the key questions include: Is the money well spent? How do educators measure the success of consumer education initiatives? And what is an effective measure to use?
Editor’s thoughts:
There are many challenges to ensure basic financial literacy skills for all South Africans. We like the completeness of SAIA’s current approach: increasing awareness in the LSM1-5 categories through various financial literacy workshops and awareness programmes and introducing financial literacy to the school curriculum with Education Department approval. If you had a few million to spend, where would you focus your financial literacy efforts? Add you comments below, or send them to [email protected]
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