Bridging the financial literacy gap in South Africa


Proposed solutions to improve investing education and inclusion, especially for marginalised communities

Travis Robson, CMgr MCMI, MBA, PGDM, FIFM

The financial landscape in South Africa is undergoing significant transformations. While initiatives like Capitec’s innovative model have propelled financial banking inclusion forward, a notable gap persists, namely: investing literacy. Many individuals, particularly those in marginalised communities, lack the knowledge and confidence to navigate the complexities of investment, thus limiting their capacity to accumulate wealth and safeguard their financial future. This article explores the investing literacy gap in South Africa, examines Capitec’s successful approach, and proposes solutions aimed at empowering communities with the necessary knowledge and tools to engage effectively in the investment sphere.

Capitec Bank – Enhancing Financial Inclusion through Innovative Banking Solutions

Owing to its accessibility, affordability, and simplicity, programmes like Capitec’s creative banking model have been successful in increasing financial inclusion for low LSM or previously “unbankable” groups. Capitec made banking more accessible for marginalised populations by providing clear pricing structures and emphasising essential banking requirements. Capitec fosters trust and loyalty within its target market by offering convenient financial services that are personalised to their needs through the use of technology and a customer-centric approach.

Understanding the Scope of the Challenge:

Despite strides towards financial inclusion, investing literacy remains notably deficient. A 2020 survey revealed that only 34% of South Africans possessed a basic understanding of investment concepts1. This gap can be attributed to various factors, including:

  1. Financial Reasons:
  • Insufficient Income: Many individuals face challenges in saving due to low wages or living in poverty, leaving little room for saving after covering basic necessities. According to a 2023 Old Mutual survey, 30% of South Africans say they have money that will last them little more than a month 2.
  • Debt Burden: High levels of debt, such as motor vehicle financing, credit card debt, or mortgages, can consume a significant portion of income, making it difficult to save. According to DebtBusters, consumers applying for debt review are spending on average 65% of their take-home pay to service debt 3. However, for consumers earning R35 000 or more per month, this average figure increases to 71%4.
  • Unexpected Expenses: Emergencies such as car repairs, medical bills, or sudden job loss can deplete savings quickly and discourage future saving efforts.
  • Financial Illiteracy: A lack of knowledge and skills in managing finances, including budgeting, saving strategies, and understanding investment options, can hinder individuals from effectively saving. Insufficient financial education within traditional schooling systems has left many individuals ill-equipped to make informed investment decisions.

2. Lifestyle Factors:

  • Present Bias: People tend to prioritise immediate gratification over long-term benefits, making it challenging to save for the future.
  • Social Comparison: Societal pressure to maintain a certain lifestyle and keep up with peers can lead to overspending and hinder saving efforts.
  • Impulse Buying: Emotional spending and lack of impulse control can result in the depletion of savings.

3. Systemic Barriers:

  • Limited Access to Financial Services: Individuals may lack access to mainstream financial services, such as bank accounts, savings products, or credit unions, making saving and financial planning more challenging.
  • Lack of Affordable Housing: High housing costs can strain available income, leaving little room for saving after covering essential expenses.
  • “Black Tax” also plays a significant role, where individuals from African communities often financially support extended family members, thereby reducing their ability to save and invest for their own future.

Learning from Capitec’s Success:

Capitec’s notable achievements in fostering financial inclusion within the transactional banking space provide valuable insights into bridging the investing literacy divide. The core belief of their approach – accessibility, education, and product design – offers a blueprint for promoting responsible investing:

  • Developing accessible investment platforms tailored to underserved communities, leveraging on mobile technology and vernacular languages.
  • Offering straightforward and engaging financial education initiatives focusing on foundational investment principles, risk management, and goal setting.
  • Designing cost-effective investment products with transparent fee structures and comprehensible explanations to demystify the investment process.
  • Cultivating trust and confidence through advocacy for sound financial practices and ethical investment opportunities, thereby empowering individuals to take control of their financial destinies.

Strategies for Inclusive Investment Education and Confidence-Building:

Promoting investment literacy among marginalized groups in South Africa is a fundamental initial stride towards fostering financial inclusion and empowerment. Here are some potential solutions:

  1. Knowledge and Consciousness:
  • Programmes for financial literacy: Create initiatives that are especially suited to underprivileged populations, and, use language and examples that are appropriate to their culture. To ensure accessibility and foster trust, collaborate with leaders in the community and local organisations.
  • Workshops on investment education: Plan seminars that cover risk management, various investment possibilities, and fundamental investing ideas.
  • Digital learning platforms: To boost accessibility and engagement, provide dynamic online learning environments with gamified components and short lessons.

2. Establishing Confidence and Trust:

  • Promote ethical and transparent investment practices: Highlight the importance of choosing reputable and ethical investment providers, thereby building trust for future investors.
  • Showcase success stories: Share real-life stories of individuals who have achieved financial success through responsible investing, inspiring others to participate.

3. Policy and Regulatory Reform:

  • Encouragement of financial institutions to innovate and offer responsible investment products tailored to the needs of underserved communities.
  • Simplification of regulatory frameworks governing micro-investments and alternative investment avenues to enhance accessibility. An example is fractional shares or Tax Free Saving Accounts (TFSA).
  • Advocacy for the integration of financial literacy education into school curriculum and adult learning programs, equipping individuals with essential financial competencies from an early age.

Investing literacy is essential for enabling people to accumulate money, protect their financial security, and engage in the economy. We can close the investing literacy gap in South Africa by adopting creative solutions and learning from successful models such as Capitec. Strategies for promoting investment literacy include programs for financial literacy, workshops on investment education, digital learning platforms, establishing confidence and trust, policy and regulatory reform, and integrating financial literacy education into school curriculums and adult learning programs.


  1. Financial Literacy in South Africa Results from the 2020 Baseline Survey.pdf (
  2. OMSIM 2023 Press Release Insights (
  3. South Africans are using 65% of their monthly income to service debt | #RealityCheck | News24
  4. Indebted consumers have 39% less buying power than in 2016 | Suid-Kaap Forum (