Absa’s roundtable on Women and Finances today highlighted several challenges women face, especially in the post-recession economy.
One of the major challenges women face in today’s economic climate is single parenthood, especially with escalating education and transportation costs.
With the household debt to disposable income at a staggering 77%, coupled with high debt servicing costs and rising consumer prices, the need for sound financial management among women cannot be over-emphasised.
Speaking at an Absa Media Roundtable on Women and their Money (held in Rosebank, Johannesburg, today), Ana Bonanni, Head of Absa Private Bank Customer Relations and Services, said: “There is a lack of long-term planning to safeguard women’s finances in the event of retirement, divorce or death. On average, women are worse off than men as more females have to work past retirement age.”
According to Bonanni, women are also vulnerable to “transmitted debt” - taking on debt from a spouse or partner because they have guaranteed a loan or are encumbered in a partner’s business dealings.
“Women therefore often need specialised financial advice to achieve financial health and to grow their wealth,” says Bonnani.
In this current economic climate of fragile growth and stagnant employment levels, entrepreneurship remains an option for women who want to attain financial freedom.
Nafeesa Humby, Head of Innovations and Solutions for Enterprise Development, said: “Entrepreneurship is not only an alternative approach towards conquering challenges facing women financially, but an effective avenue that could facilitate substantial economic growth for the nation.”
Tshiwela Mhlantla, Managing Executive for Absa Personal Loans, says that a substantial portion of the bank’s credit is taken up by female customers. “These women have been found to manage their debt more effectively and their account payment default rate is lower than that of their male counterparts.
“Trends show that women generally apply for loans in order to pay for their children’s education and household improvements. As the breadwinners of many households, this also attributes to the caring and responsible nature of a woman,” Mhlantla adds.
Despite the challenges women face, there are milestones that can inspire more women to take charge of their finances. Harriet Heymans, Managing Executive of Absa Product, Pricing and Rewards, states: “Interestingly, when it comes to short-term investments, 57% of women have Money Market Fund accounts. This is an indication that women are becoming increasingly sophisticated when it comes to investment choices.”
She adds: “Given the trends observed, it is apparent that women are becoming more financially astute.”
Heymans is, however, quick to caution women to take more ownership of their finances and emphasises that women still lag behind in saving towards their retirement.
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