Financial Literacy in South Africa

Abstract

Financial literacy education in South Africa is an active and growing field, especially promoted by major financial institutions while also included in the school curriculum. Despite these efforts, the country has scored poorly in international surveys of economic and financial literacy. Households are experiencing rising financial stress, with the household debt-to-income ratio near historical highs and the household savings-to-income ratio in negative territory. Part of the reason for the apparent ineffectiveness of financial literacy education may be that adult financial literacy has only been actively promoted since 2004 when South Africa’s Financial Charter came into effect. This chapter suggests that a more fundamental reason for the ineffectiveness is that many financial literacy programmes are not always well-suited to the realities found in dualistic economies like South Africa. The chapter proposes that financial education programmes need to be adapted in order to become more effective.