The influence of financial socialisation agents on young professionals’ financial literacy levels
- Authors: Saayman, Michelle
- Date: 2019
- Subjects: Finance -- Social aspects -- South Africa , Financial literacy -- South Africa Finance, Personal -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/43001 , vital:36723
- Description: This study is focused on the levels of financial literacy of young professionals because they are exiting university with high levels of debt and may have low levels of financial literacy as students. These young professionals enter the workforce and face complex financial decisions where they are expected to be able to make independent and sound financial decisions. They have access to all types of financial products and services and have increased levels of household debt as well as the need to fund an ageing population, such as their parents. The main objective of this study was to investigate the influence financial socialisation agents have on the financial literacy levels of young professionals. The financial socialisation agents that are investigated are parents, peers, teachers and employers. These financial socialisation agents use various financial socialisation mechanisms to influence the financial literacy of young professionals. The financial socialisation mechanisms that were identified are teaching practices, modelling of financial behaviour and pocket money (employed by parents), peer communication (employed by peers), and financial instruction (employed by both teachers and employers). An extensive literature review on financial socialisation and financial literacy was conducted. This led to the development of a conceptual framework that is tested empirically. In order to test the conceptual model for the study, a quantitative research approach was adopted. Non-probability snowball and convenience sampling was used to target respondents of the study. A total of 300 questionnaires were distributed to employees in the financial industry between the ages of 20 and 35. Of the 300 questionnaires distributed in the Nelson Mandela Bay, 263 were returned and usable, resulting in a response rate of 88 percent. Descriptive and inferential statistics were used to test the empirical data, and included the Pearson’s product-moment correlation coefficient and a multiple regression analysis. The results showed that while many respondents (42%) scored between 61 and 80 percent for the questions on financial knowledge. Only 15 percent of respondents scored higher for financial knowledge, namely between 81 and 100 percent. In terms of validity and reliability, most of the factors tested are retained; only subjective financial knowledge and financial attitude are disregarded for further analysis. The descriptive statistics showed that respondents scored a mean of 2.649 for the statements measuring educational allowance, a mean of 2.041 for the statements that measure teaching practices that includes modelling of behaviour, and 59 percent of respondents indicated that the statements that measure teaching practices that include modelling of behaviour was true; only 24 percent of respondents believe the statements regarding peer communication to be true, with the other respondents (42%) being neutral. Most of the respondents believe the statements regarding financial instruction to be true, both for financial instruction from teachers (61%) and employers (46%), and the majority (70%) of respondents believe the factor financial behaviour to be true. Only one hypotheses (H4) was accepted: There was a significant positive relationship between employers and financial literacy. The other three hypotheses (H1, H2 and H3) were rejected. H1 proposed that a significant positive relationship exists between parents and financial literacy, H2 that a significant positive relationship between peers and financial literacy exists, and H3 that a significant positive relationship between teachers and financial literacy exists. This mean that other financial socialisation agents, namely, parents, peers and teachers, did not influence financial literacy. The results show that the mechanism employed by employers, financial instruction, has a significant influence on the objective financial knowledge and financial behaviour of young professionals. Based on the results above, it is recommended that South Africa should prioritise the financial literacy of its youth. Policymakers can do this by providing young adults with financial literacy courses and require employers to provide these courses to their employees. The workshops offered by employers to the respondents of the study resulted in these respondents having higher levels of financial literacy, as H4 proposed and was supported in the results. Therefore, employers should consider providing workshops as part of their benefit package to their employees. These workshops can be about various financial matters, such as retirement planning, debt management, savings and investments, the importance of insurance and assurance, as well as a medical aid and how to apply for credit, such as home loans, credit cards and vehicle assistance. Other options that employers can consider is sending informative emails on a regular basis to their employees. Parents should also have access to financial literacy courses because the study found that parents’ teaching practices, which includes modelling of behaviour, influence the financial behaviour of young professionals. Teachers, through financial instruction, also influence the financial behaviour of young professionals. Therefore, teachers and other educators or education institutions should consider offering formal financial instruction, either on the internet, through financial articles or workshops about budgeting, record keeping of expenses, cost of credit, savings and inflation. Therefore in conclusion, it is important that policymakers and employers consider this research and provide young professionals with the necessary resources to help them make complex financial decisions. This study has contributed to literature by investigating the influence of financial socialisation agents on the financial literacy levels of young professionals in the financial industry specifically. The proposed conceptual model of the study may be useful in determining the influence of financial socialisation agents on financial literacy in the future. The study also advance research on financial socialisation and financial literacy, specifically among youth as there exist no studies that investigate the influence of financial socialisation on the financial literacy levels of young professionals in South Africa.
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- Date Issued: 2019
Factors affecting the usage of banking products and services by low income and under-banked consumers
- Authors: Giwe, Mbunwe Belter
- Date: 2015
- Subjects: Banks and banking , Bank facilities , Bank customers
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:9334
- Description: A fundamental idea of this study was that the formal financial institutions have an essential role to play in the process of assisting financial inclusion of South Africa's low income and under-banked consumers. Financial inclusion is important for consumers to have access to affordable basic financial products and services. An increase in the number of financially included consumers is important for growth of home ownership, positive savings habits among low income consumers and mitigating risks with insurance products. Consumers have access to financial products and services but are not equipped with the basic knowledge to fully benefit from the use of these financial products and services. As a result, the construct of financial inclusion and the measures being taken by South African financial institutions to optimise financial inclusion was investigated in this study. There is a broad consensus that under-banked consumers face a myriad of factors that may prevent them from having effective access and usage of banking products and services. The effective usage of banking products and services not only promotes an inclusive society but also consumers' ability to take full advantage of the benefits of having access to suitable financial products and services. The influence of these factors on the usage of banking products and services by low income and under-banked consumers was under investigation in this research study. The influence of these factors on the usage of banking products and services by low income and under-banked consumers was under investigation in this research study. To achieve this, the researcher identified a number of factors that have a relationship with usage. These include Financial Awareness, Trust, Fees, Simplicity and Appropriateness of banking products and services. Consumers' usage of banking products and services were tested using primary data collected from low income and under-banked consumers in the NMB. This study only focused on five influencing factors. The investigation of other possible factors contributing to the usage of banking products and services is necessary. Making use of a larger sample and an improved model with other pertinent influencing factors might bring to light the significant factors involved in the decisions made by consumers in the usage of banking products and services. The significant factors presented in this study reveals that of the five proposed relationships, only two were found to be significant (Financial Awareness and Appropriateness). The findings of the study show that the usage of banking products and services can be increased through increased Financial Awareness about various available banking products and services, changing the unrealised need of the consumers into a realised need for banking and providing affordable products and services for various sections of the population. Appropriateness also reported a positive significant influence on Usage. This means that consumers are likely to access their bank account at different locations. With banking institutions offering products and services that meet their needs, consumers can achieve their financial goals and improve lifestyles by doing all transactions via the bank account and having more control over their personal financial affairs. Recommendations where suggested based on the empirical results to help improve the banking institutions ways of attracting and retaining consumers to effectively use their products and services. It was recommended that banking institutions should tailor their marketing campaigns towards low income and under-banked consumers in order to improve the level of financial awareness of consumers about banking products and services they consume. Seek to improve their communications strategies by adopting techniques that effectively transmits their ideas between the banking institutions and low income and under-banked consumers. And also focus should be on the creation of innovative design systems to ensure that banking products and services will effectively address the needs of low income and under-banked consumers.
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- Date Issued: 2015