Fine print made bigger
2010-08-29 13:00
Low-income consumers will now enjoy free and independent advice on the benefits and dangers of financial products and services.
Three noteworthy events took place in August: the Financial Services Board (FSB) intensified its consumer education campaign; a major bank introduced a financial-literacy toolkit; and a non-governmental organisation (NGO), Imali Matters, was launched to offer free financial guidance to low-income consumers.
FinMark Trust estimated that by December 2008, six million entry-level Mzansi accounts had been opened in South Africa, 72% of which were opened by people who had not had a bank account. It also estimated that there were about 13 million South Africans who were dependent on social grants and in great need of financial literacy.
Imali Matters operations manager Shireen Miller said the NGO would offer information and advice on a number of financial-related issues such as over-indebtedness, defaulting, emolument attachment orders (garnishee orders), over-charging and unlawful contracts.
“Consumers often have nowhere to go to get unbiased, free information and guidance on money matters. Usually financial guidance is obtained from family members or at service providers’ premises. We want to offer an alternative,” she said.
Imali Matters was initiated by the trade and industry department, the credit ombudsman, FinMark Trust and African Bank.
Absa’s My Money My Power toolkit is aimed at educating consumers on a variety of financial matters, such as financial, retirement and estate planning, as well as insurance.
The bank said with South Africans saving only 2.7% of their gross disposable income every month, there was a need for a financial literacy programme to change behaviour and encourage the culture of saving.
Absa’s chief corporate affairs and sustainability officer Venete Klein said consumers needed to be empowered with knowledge to make sound decisions that contributed towards their future financial freedom.
The Absa initiative was welcomed by the South African Savings Institute (Sasi).
“This financial literacy toolkit will be handy in entrenching much-desired skills in our consumers,” said Sasi chief executive Elizabeth Lwanga-Nanziri.
She said this initiative complemented Sasi’s financial literacy programme called Teach Children to Save, which was aimed at equipping the youth with financial skills.
The FSB’s consumer education manager, Elliot Modisa, said they appreciated any effort to provide independent financial education to consumers as there was clearly a need for financial literacy among consumers in the low-income category.
Modisa said consumers were faced with a number of problems when using financial products. Some of these were:
- Over-selling of financial products
- Misleading advertisements
He said the FSB had conducted a number of financial literacy programmes that were intended to educate consumers on how to manage money, their rights and responsibilities when purchasing financial products, and where to seek redress.
Modisa said the board was utilising marketing company ComutaNet to broadcast financial literacy messages on its radio station at taxi ranks and train stations.
“We also educate vulnerable consumers and pensioners on financial issues such as debt management. We do this at social-grant pay-points,” he said.
- Consumers can contact the FSB on 0800 110 443 or 0800 202 087, Sasi on 011 269 3789 and Imali Matters on 011 872 2515/6
- City Press