Danny Zandamela, CEO of Ithala SOC Limited.
South African consumers are not out of the woods yet with October being declared a ‘notoriously high-risk’ month by economists and the rand coming under considerable threat.
October began with an untimely fuel price hike and yet another increase is expected in November.
The weak performance of the rand coupled with the country plunging into a technical recession in September has already raised the red flag on consumer spending.
Several credit providers have noticed with concern an increase in the number of clients who are struggling to pay off their debts as the cost of living rises considerably.
“As a financial services institution, one of our concerns is the lack of financial literacy among youngsters, which later in life leads to poor financial choices. Individuals that are not financially empowered often fall prey to the debt trap,” said Danny Zandamela, Ithala SOC Limited CEO.
Therefore, they are trying to bridge this gap by embarking on financial literacy programmes to inculcate money management skills and foster a culture of savings among the youth.
Starsaver is an annual programme championed by the South African Banking Association of South Africa (BASA) and the broader financial sector, with the aim of teaching children the importance of saving.
Ithala SOC Limited is propelling the initiative on behalf of BASA within KwaZulu-Natal.
The programme highlights the important role that volunteer bankers and financial sector professionals can play in educating our nation’s youth to become lifelong savers.
“When clients struggle to meet their financial obligations, they must immediately approach their banking institution to make payment arrangements or alternatively seek assistance from a debt counsellor,” added Zandamela.
A way to relieve some of the financial burden that many people find themselves in is to look at using the year-end bonus to cover both the December and January instalments of loan repayments and to deposit the balance into a savings account.
“Strict financial discipline and immediate lifestyle changes are imperative in the current economic climate,” he said.