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

Year 2018, Volume: 10 Issue: 1, 50 - 65, 01.01.2018

H.A. Koloba

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