FINANCIAL SERVICES BOARD FINANCIAL LITERACY AS A MEANS TO FINANCIAL INCLUSION: OECD-RBI FINANCIAL EDUCATION WORKSHOP, BANGALORE, INDIA 22 March 2010 Olivia Davids Promoting an informed nation

Introduction The FSB is a unique independent institution established by The Financial Services Board Act No. 97 of 1990, to oversee primarily the non-banking financial services industry in South Africa in the public interest In 2000 the Act was amended to mandate the FSB to: “Promote programmes and initiatives by financial institutions and bodies representing the financial services industry to inform and educate users and potential users of financial products and services”. The FSB developed a strategy for Consumer Financial Education with a vision “to see all South Africans manage their personal and family financial affairs soundly and irresponsible financial services providers not supported but reported.”.

Social situation in South Africa Vast gap still exists between rich & poor, urban & rural, based on historical inequities 4% of the population earns almost 40% of South Africa’s total personal income 75% of South Africans earn less than US $7,000 per annum University of South Africa (UNISA): Bureau of Market Research – Report released February 2010

Description of the financially excluded population in SA Form the majority of the population Are largely part of the informal economy Have little or no knowledge of financial management Are the primary target for financial education initiatives in South Africa by the FSB

Credit standing of consumers National Credit Regulator Sept 2009

Consumers in good standing National Credit Regulator Sept 2009

More financial statistics… 26% of SA adults are financially excluded and do not use formal or informal financial products 10% of the population rely on informal financial services such as savings clubs and informal moneylenders – mostly unregistered 72% of adults say they are not saving 45% of adults have some financial product that covers defined risks such as life, burial & health 28% of adults get money from friends and family as a source of income 25% of adults get an income from government social grants FinScope South Africa 2009

Problems faced by consumers… Consumers are not aware that: Some funeral insurance policies sold are not underwritten Some funeral parlors are not registered with the FSB Some insurers take unauthorised upfront deductions from consumers Consumers fall prey to pyramid schemes which are illegal Service providers keep consumers’ bank cards with their pin numbers and/or their identity documents - illegal Consumers could be negatively listed without being notified Investment companies that sell shares may not always be licensed by the FSB

FSB is implementing a targeted financial education programme Budgeting Saving Insurance Financial rights & responsibilities Using formal financial services & products

Financial education programmes are launched through… Community, workplace & other workshops Schools & educational events Print media Radio, TV & DVD programmes Taxi-ranks & shopping malls Booklets & brochures

Workshops Messages: money management, debt, credit, short-term insurance and the rights and responsibilities of consumers

Workshops 200 workshops participants Workshops were completed in December 2009

Media campaigns Weekly programmes for 6 months Others by invitation FSB staff, ombudsmen and other Financial sector institutions interviewed.

Taxi ranks Commuter education Aimed at commuters at mini bus taxi ranks, train stations throughout SA Huge TV screens at ranks, broadcasts onto train stations, into taxis and interactive education at kiosks Messages: money management, debt, credit, short-term insurance and the rights and responsibilities of consumers

Stokvel TV (Informal savings club) Project started in June and completed in November inserts on:  Budgeting  Saving  Debt management  Long term Insurance  Short term Insurance  Consumer rights and responsibilities A3 page in Daily Sun monthly for 6 months

Shopping malls Providing financial information to shoppers in a more receptive environment

Schools “Managing your money” Mathematical Literacy resource for Grades 10 & 11 Funded by FSB and SAIA Reviewed by DOE – FET Schools Facilitated 34 workshops in 9 provinces Very well received Funds approved for Grade 12 development

“Money in action” Grade R – 12 EMS, Math Lit., Life Orientation CD- ROM based 4 Stand-alone booklets per phase and band Developed by e-Learning Laboratory 60 workshops in 9 provinces Excellent teaching tool Includes voice-overs

Future outlook for FSB Launch National Strategy for Consumer Financial Education in South Africa that will: Play a stronger role in coordinating financial education Strengthen the role of industry in financial education

Lessons learned in implementing financial education programmes Multi-pronged approach In SA, face-to-face workshops have proved to be effective Monitoring and evaluation systems always in place at all phases of implementation 4 / 8 of FSB’s Consumer Education Department are qualified educators with experience in all levels of formal education as well as adult education All material is neutral with no marketing or mention of specific brands

Some lessons learned in implementing school programmes The following contributed towards the successful implementation of consumer education in schools: Obtained the support of the DOE Financial education was integrated into the curriculum Used practicing teachers to develop the teaching resources Ran workshops for teachers and education officials on how to use the resources

Thank You Olivia Davids Tel: Cell: