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Financial capability of practicing professionals: a comparative analysis of finance and non-finance professional’s financial capability.

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Being financially capable relates to having the ability to make optimal financial decisions that can have severe impact on an individual’s financial wellbeing. This severe impact may be felt immediately in the short term or may accumulate over the years and have regretful impact in the long term. As an extension of financial literacy, the concept of financial capability has been described as a broad concept, encompassing the people’s knowledge and skills to understand their financial circumstances, along with the motivation to take action. Financially capable consumers plan, find and use information, know when to seek advice and can understand and act on this advice, leading to greater participation in the financial services market. A more recent conceptualisation of financial capability describes a financially capable person as someone who posssess the right financial knowledge, financial behaviour, financial attitude and financial self efficacy. While several financial literacy studies in South Africa have suggested that South Africans have poor financial literacy levels, there is currently no study that has considered the financial capability of South Africans with the consideration of their financial self efficacy. This study delved into the financial capability of South African practicing professionals in the Kwazulu-Natal province by considering the specific research objectives: (1) To determine the levels of financial capability (knowledge, behaviour, attitude & self efficacy) among practicing professionals in KwaZulu-Natal; (2) To assess the determinants of financial capability of practicing professionals in KwaZulu-Natal; (3) To comparatively analyse the financial capability of finance related professionals visà-vis the financial capability of non-finance related professionals in KwaZulu-Natal; and (4) To evaluate the influence of socio demographic variables (Gender, Age, Profession, Professional experience in practice, Highest educational qualification, Race, & Monthly Income) on the financial capability levels of practicing professionals in KwaZulu-Natal. To achieve this, the study surveyed 242 practicing professionals in the fields of Accounting, Engineering, Law, and Medicine using a structured questionnaire that was administered via both online and physical contact methods. The collected data was further analysed descriptively and inferentially using several statistical techniques such Factor analysis, ANOVA T-test, and Regression analysis research techniques which are contained in the SPSS 25. Based on the results of analysis, the research study established an overall low level of financial capability among the finance professionals. From a componential perspective, it was further established that most of the finance professionals have low financial knowledge, good financial behaviour, poor financial attitude and good financial self-efficacy. Also, based on both the descriptive and t-test analysis, a statistically significant difference was found between the financial capability of finance related professionals and non-finance related professionals. More so, the Principal Component Analysis (PCA) revealed that financial knowledge and financial behaviour are the leading factors or influencers of financial capability among the finance professionals. Finally, the research study evidenced that education and race are the only socio demographic factors that impact the financial capability of practicing professionals in the KwaZulu-Natal province of South Africa. Keywords: Financial knowledge, Financial behaviour, Financial attitude, Financial self efficacy, Financial capability, and Practicing professionals.


Masters Degree. University of KwaZulu-Natal, Durban.