South Africa has 28.9 million credit-active consumers. At March 2025, 10.4 million of them or 36% held impaired credit records. Over the same period in which the country expanded access to higher education faster than at almost any point in its democratic history, the national financial literacy scores, measured on the OECD’s standard instrument, fell from 55 out of a 100 in 2015 to 51 in 2023.
These facts are usually filed in different places. One with a credit regulator and the other with the education department. Although they belong together. A country may increase the number of graduates entering the labour market without improving their financial competence.
This is because higher education and financial literacy are not inherently linked. Obtaining a degree does not necessarily require students to understand how credit agreements work or how to manage credit responsibly.
Where financial decision making actually begins
For a large share of South African students, university is the first environment in which they hold money in their own name. In 2026, more than 1.2 million students were approved for NSFAS funding and allowances for accommodation, transport, food, and learning materials which flow directly to them.
This is a monthly income arriving in the hands of a cohort before they have the required financial skills to manage it, right at a time where they gain access to retail credit, buy-now later facilities and the full attention of the financial services marketing industry.
The assumption is, that competence arrives only later, a skill they will acquire naturally as they grow older. Although competence comes later, it comes at a cost measured in current market prices.
The first salary, first vehicle finance agreement and first investment scam are all effective teachers and expensive ones at that. A damaged credit record at age 22 restricts access to housing finance at 32.
The institutional gap in financial education
The usual explanation is oversight. It is not. It is arithmetic.
The current reality reflects a cohort where academic ability does not equal financial capability. South African university students, a group that by any measure is academically advantaged, only poses a moderate level of financial literacy.
South African universities are evaluated and funded partly through measurable outputs such as enrolment, graduate throughput and research outputs. What these measures do not capture is whether graduates leave university financially capable.
A student with strong financial literacy and one who graduates without the ability to understand credit or manage debt may both count equally as successful graduate outputs. Despite the substantial difference in their preparedness for financial life beyond university.
The result is a structural gap, student affairs that has access to students but no curriculum authority, while faculties have curriculum authority but have no mandate to provide financial education.
Therefore, provision depends on the goodwill of individual staff members and occasional external funding. This is the predictable output of a funding formula and institutions that do what they are paid to do. Emerging evidence shows that financial education causes measurable gains. The question is not whether it works, but whether we will fund it.
What a workable version looks like
This is what the Money Moves – University Students’ Money Matters workshop developed by North-West University, as part of Money Smart Week South Africa Campaign developed by National Treasury provides a practical example of how this gap can be addressed.
The design principle was to allow students to make financial decisions using daily scenarios. Working with a fixed budget, students allocated between necessities and wants and then saw how each decision foreclosed later options. Scenario exercises traced how modest differences in spending and saving compound over several years. The content was organised around four functions, earn it, manage it, protect it, grow it.
Prof Suné Ferreira-Schenk who led the collaboration, notes that the format offers rehearsal. Errors are made that cost nothing, rather than discovering the terms of trade of a credit agreement after signing it. One participant’s summary was more precise than most textbook definitions. “Saving is a habit that has to be developed before investing is possible”.
Reflecting on the workshop, students’ general feedback was strong, providing sound evidence of demand and engagement. It showed that there is both an appetite and a need for financial education that speaks directly to their everyday experiences.
The ask? A better integrated institutional design from both public and private sectors
For universities, financial literacy at the very least should be a designed component of the first-year experience not an optional extracurricular that competes with everything else in a student’s week.
Make it practical, construct a realistic monthly budget, analyse a payslip, build emergency funds and interpret credit agreements. Where student budgets are publicly funded, the case for pairing that transfer with the capability to manage it, is close to unanswerable.
For employers, graduate financial fragility does not stay outside the workplace. It arrives as payroll administration, absenteeism, early withdrawals from retirement savings and attrition among people that have no financial buffer. Firms already fund bursaries and corporate social investment in education, directing a portion toward financial capability at the front end, will undoubtedly be cheaper than managing the consequences at the back.
South Africa invests heavily in preparing young people for work. It invests almost nothing in preparing them for wages. A degree opens the door to a first salary. Whether that salary builds anything is determined by a set of skills we have decided, without ever quite deciding, not to teach.
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