Title page for ETD etd-06242012-132823


Document Type Master's Dissertation
Author Chauke, Hlayiseka Morgan
URN etd-06242012-132823
Document Title The determinants of household saving : the South African Black middle class perspective
Degree MBA
Department Gordon Institute of Business Science
Supervisor
Advisor Name Title
Mr M Holland Supervisor
Keywords
  • saving rate
  • household savings
  • budgeting discipline
  • middle class
Date 2012-03-08
Availability unrestricted
Abstract
Saving is critical for the economic development of a country and can insulate it from unwanted inflation and financial instability as a result of international exposure. South Africa is currently experiencing low savings rates and many South Africans have difficulty servicing their debts. Black Africans form the majority in South Africa and they are therefore of critical importance with regard to saving and this country’s ability to finance future projects. It can be argued that the White South African population is becoming older and will therefore begin to withdraw its savings. A literature review has been undertaken to distil the determinants of saving in general and to observe the applicability of these determinants to Black middle class South Africans. Therefore, this paper seeks to identify the determinants of household savings of the Black middle class, with reference to questionnaires and quantitative answers from the respondents in four of South Africa’s provinces. The key findings of the research indicate that the South African Black middle class is financially illiterate and not disciplined with regard to budgeting. They show a high dependency ratio, and the need for instant gratification. In addition, people are hindered by cultural norms that inhibit them from discussing theirSaving is critical for the economic development of a country and can insulate it from unwanted inflation and financial instability as a result of international exposure. South Africa is currently experiencing low savings rates and many South Africans have difficulty servicing their debts.

Black Africans form the majority in South Africa and they are therefore of critical importance with regard to saving and this country’s ability to finance future projects. It can be argued that the White South African population is becoming older and will therefore begin to withdraw its savings.

A literature review has been undertaken to distil the determinants of saving in general and to observe the applicability of these determinants to Black middle class South Africans.

Therefore, this paper seeks to identify the determinants of household savings of the Black middle class, with reference to questionnaires and quantitative answers from the respondents in four of South Africa’s provinces.

The key findings of the research indicate that the South African Black middle class is financially illiterate and not disciplined with regard to budgeting. They show a high dependency ratio, and the need for instant gratification. In addition, people are hindered by cultural norms that inhibit them from discussing their finances. These findings can be traced back to this class’s previous exclusion from the main economy.

The recommended outcome of this paper indicates that the South African government should implement budgeting as part of the curriculum in primary and high schools. People leaving employment before retirement should not be allowed to cash out more than 50% of their pension fund, and the private sector should be involved in educating its employees with regard to budgeting and the benefits of saving, while creating an environment that facilitates access to financial providers.

© 2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria.

Please cite as follows:

Chauke, HM 2011, The determinants of household saving : the South African Black middle class perspective, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-06242012-132823/ >

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