Supply and demand drives the informal lending market, and there’s an estimated 50,000 unregistered credit providers who charge on average four or five times the legal interest on loans. And it’s these lenders that many crèche or early childhood development centre (ECD) owners are turning to, to keep their businesses afloat because they are not financially literate.
According to the 2011 Gender Statistics Report, the community and social services sector employs the most women in South Africa. Due to a lack of access to other sectors, as well as a general interest in community-based and social work, 28.7% of women engage in work within this sector compared to 15.9% of men. A significant percentage of these women run ECD centres.
These ECD centres are under threat of closure when the women running them can’t afford to keep them open – this has a direct impact on children’s development and their ability to cope in an integrated, healthy environment.
Dr Lauren Stretch, the Founder and managing director of Early Inspiration says that the interest on loan repayments from unregistered providers cripples the women running ECD centres in developing communities: “centre owners turn to ‘loan sharks’ to keep their schools open, but in the long-term, the financial stress has the opposite effect. And it’s because there is a lack of financial understanding and management of funds”.
She says that although The Department of Social Development subsidises registered ECD centres’ day-to-day costs – covering staff salaries, nutritional elements and resources – the practitioners and managers still struggle to manage their finances efficiently.
The Unity in Africa’s Early Childhood Development leg, managed by Early Inspiration, rolled out financial literacy interventions and training for ECD practitioners in 2016 targeting over 600 delegates throughout rural Eastern Cape.
The training of delegates was enabled by Metropolitan. Elsie Govender, CSI manager at Metropolitan says that their involvement in this interventional programme was to help drive healthy financial behavior. “Rural communities are often the worst hit by ruthless money-lenders – it takes financial literacy to positively change behavior and we are proud that we are able to provide this resource to such an important cause.”
These workshops aim to provide practitioners and managers with simple strategies and calculations to work out and manage their own finances and that of the ECD centre in order to make educated and calculated financial decisions.
The workshops cover:
- Understanding personal finance
- Managing finances
- Financial planning
- Financial processes
- Developing a personal and ECD centre budget
- Developing your goals
- Developing a plan of action
- Social grants assisting you financially
- Financial freedom
Early Inspiration believes each person’s informed financial decisions can help shape the country’s economy into the powerhouse it has the potential to be. “Finance is an integral part of society, for individuals it means prosperity and security that builds confidence and knowledge,” adds Dr Stretch, “the vision is that attendees will use the knowledge gained during the workshop to assist in making good financial decisions and introduce budgeting to provide the very best opportunities for the children in their care.”
Author: Kimberley Clare Ogden
The following two tabs change content below.