The SAIA’s application for a grant for 245 494 Pounds Sterling from the Financial Education Fund (FEF) was approved by the FEF. The service provider for this project is Bright Media. The project includes broadcasting on 4 local radio stations, including 1 “control” station (to monitor the effectiveness of the campaign). SAIA members would be requested to monitor if they get take-up on products offered through this awareness initiative aimed at lower income people (not subject to the constraints of the Charter or the Codes).

Through this consumer education project, the SAIA will use radio as a medium to convey consumer financial education messaging to consumers in South Africa.

The project will follow SAIA’s Consumer Education Guidelines

The aims of this project include:

• To improve the levels of knowledge and skills of lower income consumers in South Africa (LSMs 1 – 7) – many of whom are not current consumers of short-term insurance but potential consumers of our products – about general financial literacy concepts, and specifically about short-term insurance and relevant short-term insurance products in a generic fashion
• To change attitudes and behaviours regarding the use of general financial literacy tools and financial services products, especially short-term insurance products
• To empower these consumers through the above
• To link consumer financial education with uptake of relevant products
• To test whether radio/media is an appropriate vehicle for such consumer education
• To test whether there is a link between financial education and uptake of products

Through this project, 4 radio stations will be used to convey the messaging to the audience using indigenous South African languages. One similar radio station, where there will be no broadcast, will be used as a control audience. The financial education content will be conveyed through a 52 episode radio drama with characters that are relevant to this market.

The considerable research element of this project will inform the SAIA about future projects, as well as assist entities in South Africa and the rest of the world to ascertain the value and use of the media, specifically radio, and the methodology of edutainment in financial education.

SAIA member participation

SAIA members will be invited to participate in this project by providing information on their own relevant products for this market before and after the broadcasts, putting up call centre facilities to accept enquiries about their products, and reporting on such calls to the SAIA in order to draw the link between the education project and the potential uptake of products. Please look out for the communication in this regard that will be coming your way shortly.

The SAIA Board at its meeting on 26 November 2008 approved the SAIA Consumer Education Strategy proposed by the SAIA Consumer Education Committee. The strategy affected all of the SAIA members as participation in SAIA consumer education was now a requirement of SAIA membership, irrespective of whether the industry is governed by the Financial Sector Charter (the Charter) or not. The SAIA Board, in reaching this decision, considered the uncertain future of the Financial Sector Charter, the fact that consumer education remains a priority for the South African Government and National Treasury, and the Financial Services Board (FSB), and the commitment the financial services industry as a whole has made with regard to increased access and consumer education.

Subsequently, the SAIA Board, at its meeting on Tuesday, 4 August 2009, considered a request that SAIA members that have received exemption for consumer education in terms of the Charter will also be exempted from consumer education in terms of the SAIA Consumer Education Strategy. The request was granted.

The new SAIA Consumer Education Strategy includes the following aspects:

• All the relevant SAIA members are required to contribute 0.2% of their after tax profits to consumer education in the low-income market, except those who have received exemption.
• All the relevant SAIA members are required to contribute a minimum of 0.1% of their after tax profits (half of the 0.2%) to the SAIA collaborative initiative, unless a member spends consumer education funds within his group.
• The funds in the SAIA pool will be used by SAIA for generic consumer education, with an emphasis on short-term insurance, together with its partners as it has done over the past five years. These funds will be spent according to the SAIA Consumer Education Guidelines and the Financial Sector Charter Standards as long as these have an influence on the industry’s efforts.
• The relevant SAIA members who wish to make in-roads in the low income market by implementing their own branded consumer education projects, preferably in the identified target market and/or at point of sale, could use the remaining 50% of their 0.2% after tax profits on such initiatives. These funds should be spent according to the SAIA Consumer Education Guidelines. This expenditure should be reported to SAIA.
• Any SAIA member who wishes to contribute the full 0.2% to the SAIA pool initiative may do so.