Financial literacy in South Africa: results of a 2012 national survey update

Abstract

The 2013 financial literacy report is the second study of its kind to have been conducted in South Africa. Both reports were based on a 2010 financial literacy pilot study which followed the conceptual framework of the Organisation for Economic Co-operation and Development (OECD) initiative. The objective of this report is to provide the Financial Services Board (FSB) with information about financial knowledge, attitudes, skills and behaviours of consumers. The purpose of the study was therefore to generate information on the levels of awareness, knowledge and understanding of financial literacy and systems at a national level. Such information will assist the FSB consumer education programme to help all South African consumers to achieve sound financial management. The broad objectives of the 2013 financial literacy report were informed by the 2012 financial literacy report allowing comparability between both reports to be established. The primary goal of this 2013 report is to determine levels of financial literacy in South Africa by providing composite measures of financial knowledge, attitudes and behaviour in the post-apartheid nation. Such measures would allow researchers to benchmark these against those of other countries. Furthermore, the information provided by this report can be used by policy-makers to inform public policy relating to low financial segments and assist in developing strategies to improve financial literacy. The executive summary presented here provides a summation of the findings of the 2012 module on financial literacy in the South African Social Attitudes Survey (SASAS). In order to provide an operative synopsis, it is important to note that financial literacy is a complex multi-dimensional concept that comprises a combination of awareness, knowledge, skills, attitude and behaviour. This combination can be effectively expressed by investigating four financial domains: a) financial control b) choosing and using appropriate financial products c) financial planning and d) knowledge and understanding. Such an outline was comprised using a methodological approach informed by the OECD. The 2013 financial literacy report follows the conceptual framework of the OECD initiative. Based on this methodological approach, the 2013 financial literacy report is subdivided into themes: money management; planning ahead; choosing financial products; and financial knowledge.