Research Indicates that SA Needs More Financial Education

In 2008 / 2009 a study was conducted by FinScope, a research company established by Finmark Trust, to monitor the use and perceptions of the financial sector in South Africa. The findings of this research report indicate that South Africa’s public desperately need education in terms of financial literacy.

According to the research, in spite of South Africa’s 88% basic literacy level there are still high levels of misunderstanding —or no knowledge at all —of key financial terms. Approximately 60% of the individuals indicated that they have never heard of financial terms like debt re-scheduling, debt administration, debt counselling, the NCA, personal credit report and/or bad debt.

The research also indicates that less than 15% of poor people have been exposed to the formal banking environment which means that they are ignorant with regards to their rights and the consequences of entering into a formal financial agreement and dealing with unscrupulous lenders.

In terms of saving and planning for retirement, the research indicates that 67% of poor people have no retirement plan due to either their impoverished circumstances or lack of knowledge there of.

During the research the respondents where also asked about what they would like to know more about. The following topics were highlighted:

• How to make effective use of savings products
• How interest rates work and how they are calculated
• How to draw up and manage a budget effectively
• How to select the best investment products
• How to insure or obtain life cover
• How to find the best companies for insurance

These findings are truly astonishing and it motivates why financial literacy training should be such a big priority in our society. Compuscan Academy aims to address this problem in South Africa by offering financial literacy and money management training programmes which covers all the problems mentioned above. Our programmes enable individuals to:

• Take charge of their financial situation.
• Assess and understand their financial status
• Budget.
• Make intelligent saving decisions
• Invest their savings
• Understand creditworthiness when applying for credit
• Understand default information and judgments
• Manage credit accounts responsibly
• Get out and stay out of the debt ‘trap’ and who to turn to for help
• Understand credit bureaus and credit reports
• Obtain a credit report