By Claire Klassen
The world over, financial illiteracy is usually synonymous with poverty.
In developing countries such as ours, studies have shown a direct correlation between a lack of financial understanding with a poor education, lower income levels and periods of sustained financial stress.
Yet what is interesting – particularly given that in most aspects of economic emancipation women have historically drawn the short straw – is that South Africa (SA) is one of the few developing countries that show similar levels of financial literacy between men and women.
Without looking at the data, you might have assumed that when it comes to basic financial literacy, women once again lag behind men; just as we do when it comes to pay parity or C-suite representation. Yet while overall financial literacy levels remain low in SA, the playing field between men and women has evened out.
As reported in the Southern African Labour and Development Research Unit (SALDRU) 2019 National Income Dynamics Study (NiDS): “In most countries, female, less educated and low income respondents display lower levels of financial literacy. We find similar results in South Africa except for gender. South African men and women display the same level of financial literacy. Even within households, we find no statistically significant difference between men and women.”
The Financial Sector Conduct Authority’s (FSCA) Financial Literacy 2020 study highlights this apparent juxtaposition, noting that in a patriarchal society such as South Africa, responsibility for day-to-day money management decisions has traditionally been considered the domain of the household head – usually the male. However, it states that “Interestingly, more females (37%) than males (34%) were solely responsible for day-to-day money management,”admitting that this might suggest a form of financial emancipation over time as “financial decisions were typically made more by the employed and the educated.”
Education among women has certainly increased. Data from the Council on Higher Education (CHE) shows that there were significantly more female students studying in South Africa's universities in 2019 than there were males, with more female graduates. And with greater access to information and other resources, more and more women are taking ownership of their empowerment. In my role as Consumer Financial Education Specialist at Momentum Metropolitan, we host a range of programmes that aim to tackle financial illiteracy at a grassroots level, and I am encouraged to see the percentage of female participants grow each year.
I maintain that women have always known a great deal about managing finances, especially when they are faced with being the sole or primary caregiver in a household – a growing phenomenon in SA.
Yet if this is the case, why are we still trundling behind men in those areas directly related to our financial wherewithal? The FSCA report lists a series of concerning findings: educated women are less likely to find work, indicating a clear gender bias to unemployment. Men are more likely to have short-term insurance than women – a disparity which seems to have doubled over a five-year period. More women than men struggle to service their credit commitments. Women are more likely to be negatively affected by contemporary economic conditions – something that was illustrated in the starkest of terms during the pandemic. Finally, a statistically-significant disparity exists between the percentage of women (23%) who closely monitor the social grants market than men (17%) – indicating a more pressing need.
So what needs to happen to see the financial health and success of women shift? This is a complex topic that would require a far lengthier word count than the average attention span might allow, so I am going to summarise what I believe to be the three most pressing actions:
Corporates need to actively drive women empowerment
In South Africa, women have only been recognised as equal citizens for a little over two decades, but they have power, strength and individuality that should be acknowledged and nurtured.
Businesses need to actively support the advancement of women – through their internal and public policies, as well as through Corporate Social Investment (CSI) programmes. CSI should not be viewed as a tick box exercise but rather a powerful tool with the ability to transform society.
The public sector needs to address female financial inclusion as a priority
The FSCA is mandated to drive financial inclusion, while the Financial Sector Charter exists to promote access to financial services, supported by financial education. However, these initiatives are aimed at SA society at large, and not solely concerned with female advancement.
One study into the financial inclusion and women's empowerment in South Africa, which looked specifically at female entrepreneurs in Gauteng, clearly articulated the need for government to create and implement strategic policies and programmes specifically aimed at women as a priority, with a clear monitoring and evaluation framework in place, to analyse the success of all financial inclusion programmes.
One trailblazer leading the way in measuring the real impact of funded programmes is Next Generation founder Reana Rossouw, creator of the Investment Impact Index. I recently attended a Masterclass on Impact Management and Measurement with representatives in government, large funders, non-profit organisations and corporates. The room was filled with hope, and one could feel the tide turning towards measured impact for a better society.
Our mindsets need to change
Finally, let’s not discount the critical role of our own mindset. Recent research conducted by Momentum for its #SheOwnsHerSucess Women’s Month workshops found that “Women, particularly those who double as parents or caregivers, can falsely believe that saving for retirement or other goals is selfish when loved ones need the money today.”
Interestingly, while the research was conducted among a more affluent sample, with the majority of respondents spread among middle and junior management positions, participants still gave themselves a ‘low’ ranking when it came to their financial success, defined by their money management skills, financial literacy, and financial capability.
The respondents listed certain self-limiting barriers standing in the way of them owning their success: they felt that there was a certain “maleness” to shouting about their achievements; they didn’t prioritise themselves; a lack of confidence; and that there was a feeling of shame attached to finding success when other women still battled.
Yet as noted by Samke Mhlongo, founder of The Next Chapter Wealth Partners and one of the speakers at Momentum’s Financial Success workshop; to enjoy success, we first need to heal ourselves. This starts with changing our own beliefs around what we deserve – and what we are capable of. And we all play a role in driving this change.
Claire Klassen is a Consumer Financial Education Specialist at Momentum Metropolitan
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