Wonga SA report on aspects of the S&P Global Financial Literacy Survey
Wonga SA is taking a proactive role in promoting financial literacy. Here in South Africa, according to the recent Global Financial Literacy Survey carried out by S&P Rating Services, the percentage of adults who are considered financially literate is approximately 42%. This figure is well below the average of the countries with the most advanced economies (countries like Germany, the US and the UK), but still well above the global average.
The goal of the survey, which is the only one of its kind to be carried out on such a large scale, was to measure financial literacy of the global population. In addition, the survey was also designed to gather information for academics, policy makers, the private sector and regulators, enabling them to create effective educational policies and programs with regard to financial literacy.
Creating Barriers to financial awareness
The standards of financial literacy create a critical barrier with regard to financial awareness inclusion, when the individual standard is too low. Poor financial literacy means that people have a basic lack of knowledge with regard to finance itself, how it works and what financial products are available. It means that these people are therefore not able to access banking/financial services, making this illiteracy a self fulfilling prophecy of its own doom.
This is precisely why financial literacy is so important, not only to individuals here in South Africa or wherever else they may happen to be around the world, but also to the economy of their host countries. This is one of the reasons that we here at Wonga SA are so determined to raise the standards of financial literacy here in South Africa.
General items of financial literacy trivia
Some interesting snippets of information also came out of the report:
● Approximately 61% of adults in China don’t put money aside for their old age. About 72% of these people are those with financial literacy
● Approximately 47% of adults in India (around 415 million adults) do not have bank accounts
● Around 80% of people without bank accounts have poor levels of financial literacy.
● There is a wide divergence in financial literacy rates across the various economies in Sub-Saharan Africa. Angola and Somalia with 15% are among the countries of the world with the lowest financial literacy rates. Botswana at 52% is the country with the highest literacy rate in the region
Typical profile of people with low financial literacy
The report concludes that financial ignorance carries with it a significant cost. People who don’t understand the fundamentals about interest are those who spend more on transaction fees and are also prone to run up bigger debts and undertake commitments that have higher interest rates attached to them. These people also have a tendency to not only borrow more, but to save less too.
Wonga SA seek to improve everyone’s financial health and well-bring
Here at Wonga SA we have set out our stall to increase our clients’ financial literacy through our “Borrowing and debt advice” and “Do you understand debt” web-pages on our website. We’ve also recently launched our fraud hotline to assist anyone caught out by scams and phishing emails and texts.
The better the South African population’s health and well-being is from a finance point of view, the better off we all are including the country as a whole.