The JSE partners with SAReserve Bank, Financial Planning Institute, SASI and others to improve youth financial literacy

August 12, 2011


11 Aug 2011: The Johannesburg Stock Exchange (JSE) has partnered with the South African Reserve Bank (SARB), the Financial Planning Institute (FPI), the South African Savings Institute and the National Credit Regulator (NCR) to improve financial literacy amongst South Africa’s youth.

National Youth Financial Literacy Day, to be held annually, follows last month’s national savings month and forms part of the JSE’s project aimed at growing the economy by taking financial knowledge and literacy to young people.

“As part of the focus on financial literacy, the JSE has a contractual agreement with several provincial Education Departments through which the exchange provides courses to schools which teach learners and teachers about banks, savings, investment and related topics,” says JSE executive Noah Greenhill. “We have succeeded in making this part of the syllabus in some provinces. This forms part a drive to develop an investment and saving savvy South African population.”

“Long-term national saving rates do not go up by accident – nor do they do so quickly. Inevitably, with or without large inflows from outside, the vast bulk of domestic investment is still financed by its own citizens and in recognition of this fact we have implemented a number of initiatives to educate the wider public about the world of investing,” adds Greenhill.

The JSE, SARB and various partners held the full day event at the Sandton Convention centre for the benefit of young people wanting to know more about money matters. Given recent world events, the importance of investing and sticking to a long term plan is vitally important for the youth.

Knowing, for example, how to use credit wisely is critical, especially for the increasingly number of youth headed households. Credit Bureaus records show there are 18.60 million credit active consumers, across the various age categories with 46.4% consumers having impaired records.

“If one is financially smart one can use credit successfully. Saving instead of spending without a budget and life plan, not being seduced by instant gratification, avoiding taking on unnecessary credit, and paying well in terms of any credit that is taken on – all of these habits make for highly desirable consumers who will also have benefits for credit providers and the economy,” says Darrell Beghin of the South African National Credit Regulator.

South Africa still has a dismal savings rate, especially at household level (0.2%/GDP). Elizabeth Lwanga-Nanziri of the South African Savings Institute points out that a high savings rate is desirable for sustainable growth of a nation and to fight poverty and household vulnerability.

“Domestic savings mobilization helps the poor to get out poverty, as is access to key information. A financially literate population will understand financial facts and concepts, appreciate financial risks and opportunities to make informed decisions, know where to go for help, and ultimately take actions that improve theirs and the country’s financial health,” says Lwanga Nanziri.

The recurring theme is that everybody can, and should, save. “Typically people spend first and then save, but that is the wrong way around. We need to learn to save first and then spend, even if that means only saving R1 of R10. It is a culture and tradition of saving and investing that needs to be instilled in our youth that is vital to achieving financial freedom. For the youth they have the benefit of time on their side and need to start as soon as possible,” comments Simon Brown of JustOneLap.

The Global Competitiveness Report for 2010/11 notes that South Africa’s gross savings rate was 16% of GDP in 2009, compared to China’s 52%, India’s 37% and Russia’s 22%.

“This low savings rate, especially at household level has got negative spill over effects, leading to an increased burden on the state to provide safety nets. Despite the advent of the introduction of the National Credit Act in 2007, many South African consumers face the challenges of high indebtedness and only education and a change of attitude will change that,” says Solly Keetse, Chairperson-Elect of the Financial Planning Institute.

For many years financial literacy has been neglected. There was also general agreement that people should be equipped with social skills, but financial literacy was not necessarily included as one of these skills. “I am confident that this Financial Literacy Day will make an important contribution to the improvement of the general understanding of financial and economic matters,” adds Jannie Rossouw South African Reserve Bank.
Notes to Editor:
The National Financial Literacy Day workshop covered a range of topics including basics in Economics, savings and money management, the role of the South African Reserve bank, investment opportunities on the JSE, credit rights and the importance of sound financial planning. Speakers at the event included Jannie Rousouw, Deputy General Manager of the South African Reserve Bank, Simon Brown CEO of JustOne Lap, Elizabeth Lwanga-Nanziri CEO of the South African Savings Institute, Geoff Rothschild, JSE Director of Government and International Affairs, Solly Keetse, Chairperson-Elect: Financial Planning Institute and Darrel Beghin of the South African National Credit Regulator.

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As South Africa’s only full service securities exchange, the JSE connects buyers and sellers in four different financial markets, namely equities, equity derivatives, commodities derivatives and interest rate instruments. The JSE Ltd offers the investor a first world trading environment, with world class technology, surveillance and settlement in an emerging market context. It is amongst the top 20 largest equities exchanges in terms of market capitalisation in the world.

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About the FPI
The Financial Planning Institute of Southern Africa (FPI) is a non-profit professional body formed in 1981 as the Institute of Life and Pension Advisors (ILPA) to improve levels of professionalism. Living in a global village meant ensuring that local practices were aligned to global standards. To ensure that Financial Planners in South Africa met international standards, in 1998 the FPI affiliated with the Certified Financial Planner Board of Standards Inc. in the United States, in April 2000 adopted the new name (Financial Planning Institute of Southern Africa) and were a founding member of the international Financial Planning Standards Board (FPSB).

Today, the FPI is regarded as the leading independent professional body for financial planners in South Africa that ensures South Africans have access to, and value, competent financial planning. Through the global partnership with FPSB in the United States along with 23 other countries, the FPI is the only institution in South Africa able to offer the CFP® certification.

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