FINANCIAL SERVICES BOARD

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FINANCIAL SERVICES BOARD
Promoting an informed nation

• FINANCIAL LITERACY AS A MEANS TO FINANCIAL
  INCLUSION OECD-RBI FINANCIAL EDUCATION WORKSHOP,
  BANGALORE, INDIA 22 March 2010
• Olivia Davids

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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.
• .

3
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
  Africas 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

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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

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Credit standing of consumers
National Credit Regulator Sept 2009
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Consumers in good standing
National Credit Regulator Sept 2009
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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

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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

9
FSB is implementing a targeted financial
education programme

• Budgeting
• Saving
• Insurance
• Financial rights responsibilities
• Using formal financial services products

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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

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Workshops

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

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Workshops

• 200 workshops 5000 participants
• Workshops were completed in December 2009

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Media campaigns

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

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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

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Stokvel TV(Informal savings club)

• Project started in June and completed in November
  2009.

• 6 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

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Shopping malls

• Providing financial information to shoppers in a
  more receptive environment

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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

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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

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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

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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 FSBs 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

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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

22
Thank You

• Olivia Davids
• Tel [phone]
• Cell 27 082 8522090
• E-mail oliviad_at_fsb.co.za