Grant Koks, Investor Relationship Manager at Foord Asset Management

While approximately four out of five South African adults have a bank account, a recent study by the World Bank reveals that this has not spilled over into broader use of financial services, leaving many South Africans financially excluded. Adequate financial knowledge is critical to bridge the gap from day-to-day transactional savings accounts to financial empowerment.

This is according to Grant Koks, Investor Relationship Manager at Foord Asset Management, one of South Africa’s largest independently owned investment houses, who says that increases in bank account take-up do not necessarily equate to sustained financial inclusion. “We only need to look at South Africa’s low savings rates to know that more needs to be done.”

South Africa has one of the lowest savings rates in the world. According to data from the South Africa Reserve Bank, household savings were estimated to be 0.13 percent of Gross Domestic Product in 2022.

Koks says that at the heart of the issue is a lack of financial education which results in widespread financial illiteracy. “According to the Deloitte South Africa Consumer Signal report for Q1 2024, share of wallet reserved for saving and investing was only 6% – a lower priority than entertainment and leisure which came in at 11%. This, along with crippling debt behaviour of many South Africans highlights the lack of financial know-how in money related decisions,” says Koks.

The unfortunate knock-on effects of poor financial decision making are profound for the economy, and the development of South Africa as a nation. “Over half of South Africa’s population hasn’t got a grasp on basic financial concepts like interest rates, inflation and savings. This is a major barrier to creating sustainable financial inclusion for communities,” says Koks.

He believes that driving financial education at grass roots level is a critical tool in reshaping the economic trajectory of our nation – and corporates have a role to play. “The private sector has a moral imperative – especially those in the financial services industry – to support government in its efforts here.”

According to Koks, teaching financial concepts to children from a young age and their caregivers is crucial. He points to Foord’s financial education initiative – Teach your child to invest – a series of short, downloadable books that aim to teach the basics of investing through storytelling.

The series reaches out to future generations of South Africans with clear, yet creative messaging about investing. It explores life-skills such as time, saving, income generation, compounding, diversification, risk, patience and investing for the long term.

Koks adds that financial education programmes can often be hamstrung by the lack of vernacular translations. In an effort to drive accessibility, the books have been published in four languages – English, Afrikaans, isiXhosa, and isiZulu. In November, the series will also be launched as lesson plans for use in schools to further drive uptake.

“We’re passionate about teaching children (and their caregivers) the importance of investing for the long term. And what better way to do it than with a book that can be read repeatedly. It is the perfect platform for parents and teachers to start the conversation about investing and, more importantly, the springboard to keep having that conversation.”

ENDS