Very interesting topic, I would like to pass the burden on this topic over to the government for not educating people enough on financial matters.
It appears they (the government) have passed on this huge task to the banks, whose prime interest is “interest”; currently a majority of people think that saving means leaving money in the bank until such time as it accumulates to the desired savings amount.
This idea is endorsed by banks, because each bank earns on average R47 on each R1 saved with them (this is covered in any macroeconomics textbook under the topic “money creation”).
If we (actuaries and finance majors) would design saving products, these would have to be sold through banks thus reducing the incentive behind critical and innovative ideas around saving.
Basically most South Africans live under the poverty line; there are no savings vehicles and financial assets which they could buy such as bills or bonds (which are totally secure and thus could be used for savings) without their return being trumped by transaction costs.
So, a reasonable product would then be one that combines or collects these individuals' savings/premiums and then uses these to purchase risk-free assets in the market.
Government should be held responsible, first for giving up the country's fiscal and statutory power over to the Reserve Bank and the FSB and second, for subjecting people to the laws which imminently stem from such INDEPENDENT entities.
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