ACCESS TO CREDIT AND SAVING BEHAVIOUR OF GENERATION Y STUDENTS. ARE WE EDUCATING AN OVER-INDEBTED GENERATION?

Abstract

Credit is deemed central to the economy of a country. However, it becomes a problem when people find it difficult to meet their financial obligations and end up becoming over-indebted. Previous research in consumer behaviour among South Africans has revealed that households are over-indebted. Coupled with this, South Africa is known as a consuming nation with a poor savings culture. The review of literature reveal that university students are not spared since companies are targeting them with credit products in an effort to increase their market share. The purpose of this study was to investigate the influence of access to credit on the savings behaviour of Generation Y students. The study adopted a quantitative research approach. Data were analysed from a total of 145 Generation Y students who had fully completed the questionnaire. Exploratory factor analysis was used to establish whether the data were factorable. Correlation analysis was used to investigate the relationship between access to credit and savings behaviour of Generation Y Students. Single regression analysis was used to investigate whether access to credit influences savings behaviour of Generation Y students. The results show that access to credit has positively influenced the saving behaviour of Generation Y students. Based on this, if access to credit is not managed well, Generation Y students and young people in general will find themselves overindebted. A culture of saving among this cohort should be encouraged. It is therefore recommended that Universities should introduce financial literacy programmes for students across different fields of study. Furthermore, government should institute stringent measures to punish non-compliance with the National Credit Act by credit providers.

Keywords

• Access to credit, Savings behaviour, Generation Y students, Overindebtedness