Tackling financial literacy is a critical challenge for South Africa.
We’re one of the most indebted nations in the world. The latest National Credit Regulator data indicates that 40% of credit active consumers have impaired status, which means they have in some way failed to meet their obligations, and the 2016 MMI Unisa Consumer Financial Vulnerability Index shows that South Africans are feeling ‘very exposed’ in terms of their finances.
Poor understanding of financial basics and the absence of planning are cited as key contributors to this sense of vulnerability. Regard Budler, Employee Benefits Specialist at Momentum, says the good news is that both of those factors can be relatively easily addressed: “If the majority of South Africans can receive some fundamental financial education and then be persuaded to start with some basic planning we would be taking a huge step towards financial wellness”.
To meet this urgent need, MMI Foundation launched the Motheo Financial Dialogues financial literacy program under the Momentum brand in 2014.
Motheo Financial Dialogues is a user-friendly multimedia programme for communities or businesses which provides the basic tools to improve knowledge about money. The three-week programme includes understanding a payslip, how to budget, understanding retirement and insurance benefits, and how to recover from over-indebtedness. “The interactive sessions equip people with much needed financial savvy while enabling them to deal with the difficult-to-have conversations about finances,” says Emmanuel Mahlangu, CSI Manager at Momentum.
Budler says Motheo Financial Dialogues provides relevant and practical content with an emphasis on implementing what they have learned in the real world.
“Individuals who are caught in a web of debt are often emotionally and mentally stressed which easily impacts on physical health and productivity in the workplace. But we all know that knowledge is power and as soon as an employee gains an understanding of the basic issues and learns some simple practical solutions they can start to regain a degree of control over their finances and their lives”.
He adds that programmes like Motheo Financial Dialogues are also important in simply getting people talking about personal finances: “This can be a difficult topic for many in South Africa and that compounds the problems so the programme encourages participants to take conversations about money further within their families and their communities.”
Budler is pleased with the impact of Motheo Financial Dialogues but acknowledges that both business and government need to do far more: “The human cost of poorly managed debt is severe and unproductive employees could be draining as much as R70 billion each year out of the economy so we simply have to give people more tools to handle their money better, especially in such a tough macro-economic climate.”