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.
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
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:
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.
About the JSE Limited
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.
For further information, please visit www.jse.co.za
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.
For more information visit www.fpi.co.za
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