Measures to improve household savings in South Africa.
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Date
2011
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Abstract
The level of savings in South Africa has been described as dismal and on the
verge of becoming an economic crisis. Household savings has declined to a level
of dissavingand is therefore in need of rectification. Savings can be broken down
into household, corporate and government saving. The purpose of this research is
to identify measures to improve household savings in South Africa. A critical
review of household savings is conducted in chapter two utilising secondary data
to examine household savings, identify factors affecting savings as well as
establish measures to improve household savings. The study gathers primary data
from 10leading economists and financial experts located in South Africa.A
qualitative study is undertaken as it helps provide intrinsic information on the
thoughts and opinions of the sample group on measures to improve household
savings. The research has revealed that South African households are not saving
sufficiently and that there are a few key factors affecting households savings. The
key factors are indentified and investigated in the literature review and further
examined by the respondents for their expert opinions. The respondents have
identified thathousehold savings behaviours are insufficiently contributing to
savings and there is a lack of a savings culture to encourage positive savings
growth. Consumers are caught up in a web of consumerism with easy access to
credit as a result of financial liberalisation. These two factors have created a debt
trend and left many households in a downward spiral of debt. The respondents
have identified the main factors affecting households as: savings culture,financial
literacy, consumerism, income levels, education and interest rates. Measures
identified to improve household savings are: Tax breaks, government incentives to
saving, education, budgeting as well as developing a national culture of saving.
These suggestions help outline a path for government, corporations and
individuals to follow in achieving greater household savings. The research has
outlined measures to improve household savings and stressed that there is no one
single measure to rectify the savings dilemma, but rather it is to identify and
acknowledge that the savings solution lies in addressing each of the factors
affecting saving with a view to improving saving as a whole.
Description
Thesis (MBA)-University of KwaZulu-Natal, 2011.
Keywords
Basic needs--South Africa., Cost and standard of living--South Africa., Household surveys--South Africa., Household economics--Social aspects., Theses--Business administration.