Get more Mail & Guardian
Subscribe or Login

Funding a new generation

Fundisa – launched by the Association of Collective Investments (ACI) in mid-November 2007 – is a key contribution to the financial industry’s efforts to promote access to affordable financial products in accordance with the Financial Sector Charter.

This subsidised account is designed to foster saving for education and is aimed at lower-income groups. It could help to embed the habit of long-term saving by families that set goals and use education as an upliftment tool. With luck, the long-term effect will be to break the cycle of dependency and reliance on social grants. The hope is that this simple, targeted savings product will deliver huge gains for clients, communities, industry and our country.

Savers receive a 25% bonus from government in addition to the money they save. The minimum investment is R40 a month. If savers commit R480 in the year, the account will be topped up to R600 with government’s 25% bonus and so on through the life of the product. Each saver designates a learner whose tertiary education costs will be met, in full or in part, by Fundisa build-up.

Ultimately, capital is channelled to the college or university attended by the learner, as long as the institution is covered by the National Student Financial Aid Scheme.

Any South African citizen can open a Fundisa account for the benefit of any child, but must first have a bank account like Mzanzi, the Standard Bank E-Plan or similar account structured to foster saving by previously unbanked clients. The prospect of educational bonus payments is therefore a further inducement to enter the banking system.

Fundisa savers secure their bonuses by sticking with the savings programme and using the money to assist the designated learner (though the learner-beneficiary might be changed should the initially named child decide against further education).

As South Africa’s largest unit trust company, Stanlib was eager to drive Fundisa forward, identifying obstacles and suggesting solutions.

Synergies with national policy were complemented by synergies within the Standard Bank and Liberty Life groups. To contain distribution costs, it made sense for Stanlib to expand Standard Bank’s national branch network to promote Fundisa and make application forms available.

The Stanlib version of the product is therefore branded “the Standard Bank Fundisa Fund”. Inflows are invested with the banks and a portion goes into government bonds, earning a competitive yield while creating potential for capital growth.

The educational bias echoes the most enduring leitmotif of the Liberty Life corporate social responsibility programme. Since the Liberty Foundation began its work in 1971, educational initiatives for the benefit of disadvantaged communities have been among the largest recipients of assistance.

Since 1990 alone, the foundation has given more than R350-million to programmes that support the state education system. A financial product in support of lower-income families was therefore applauded across the Liberty Life group.

Growth in the investment industry cannot simply be a function of market gains. On occasion, volatility can eradicate growth like that. Sustainable growth has to be underpinned by constant expansion of the customer base.

Anthony Katakuzinos is Stanlib’s director of client services. For further info call the Stanlib contact centre on 0860 123 003

Subscribe to the M&G

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

Mbeki tells ANC that land without compensation goes against the...

‘This would be a very serious disincentive to investment,’ says Thabo Mbeki in a document arguing that the ANC should not proceed with the Constitutional amendment of section 25

Micro-hydropower lights up an Eastern Cape village

There is hidden potential for small hydropower plants in South Africa

More top stories

Gigaba says it was ‘an unfortunate coincidence’ SOEs were captured...

The former public enterprises minister says he was at a deliberate remove from state companies’ dealings and could not have learned of the looting

SIU freezes R22-million in Digital Vibes accounts

The Special Investigating Unit said it would ask the tribunal to declare the health department’s contract with the company unlawful

Life-saving free train travel offered to domestic abuse victims in...

A pioneering railway scheme in the UK is helping domestic violence victims to escape their abusers by providing them with free travel to reach refuge

Oral submissions to inquiry on local government elections start next...

The hearings will be open to the media and the public, under strict level-three regulations
Advertising

press releases

Loading latest Press Releases…
×