I have advocated for financial inclusion for more than five years. I have always had an impression that if one has an active account with a bank and/or mobile money, then one is financially included. Subscribers get excited when the regulator announces an increase in the number of active accounts. As we work towards improving our domestic resources, there is no better statistic than a reduction in financial exclusion.
BY MUNYARADZI NYAKWAWA
Just as I was celebrating the birth of Christ in my rural home, I happened to visit a local business centre where people were drinking as if it was their own birthday. I wasn’t surprised, it was Christmas. I managed to strike a conversation with the barman and what he told me got me thinking.
Are we as a country doing enough for our pensioners?
The barman told me that the majority of people who were drowning themselves in liquor were regulars and it wasn’t a Christmas thing. He had observed a pattern: most of them were pensioners and the majority of them swarm his place just after pension pay-outs. The number decreases as another pay-out date approaches.
While most of them have active accounts and are financially included, I still felt financial inclusion has to include lessons on financial wellness. Pension fund managers and social security should come in and assist pensioners on the transition. Last year I wrote about the plight of the pensioners who were sleeping on verandas to access their pensions from banks. Thanks to decision-makers at NSSA, the majority of the pensioners are now receiving their pensions conveniently via mobile money accounts. But, they are now sleeping in bars.
Sustainability and humane aspects of financial inclusion
My experience with the pensioners in my village has made me realise that we cannot continue to concentrate on figures and statistics. If we do, financial inclusion might as well look like window-dressing and we may lose the plot. It’s high time that financial inclusion goals and practices take a human face and become sustainable. One author described financial inclusion as the oil in the Sustainable Development Goals (SDG) engine. It may not have been explicitly stated, but without inclusion, none of the 17 SDGs would be achieved. One of the SDGs is to eliminate poverty, but how do we achieve that if all pension funds are going straight to the watering hole? While every individual has to make their own retirement plans, we all appreciate that retirement comes with a lot of questions and challenges — some psychological, with the majority being financial. Most of us in the working class are contributing to a national pension scheme or are members of private schemes. However, having made contributions from the three companies that I have worked for, not even one of my pension fund managers has visited my workplace to educate and prepare those who are edging towards retirement.
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While the legal duty of the fund manager is to pay the monthly pension, there is no harm in investing in training and development of would-be pensioners. There is nothing wrong with pensioners drinking, but if we dig deeper, there is an inherent problem that is leading the majority of them to betting houses and beer halls. This can be solved by proper financial education. Not every pensioner is financially literate and it is an aspect that the fund managers can add to their portfolio with a view to assist contributors.
How about financial education for pensioners as corporate social responsibility? After all, pension contributions are the insurers’ life-blood.
Almost on a monthly basis we see health and safety tips in the workplace for those that are still working, how about pensioners who are not in the workplace anymore?
Financial inclusion, financial literacy and retirement planning
Coincidentally, on the day I was observing pensioners at the business centre, my wife was having a conversation with my father at home (she and our daughters were the only reason why he didn’t join the others at the watering hole) and he was expressing how he feels so lonely and incapacitated at home. This is a man who spent three quarters of his life running around making ends meet, but is now reduced to meeting the brown bottle on a daily basis. He has an active bank account and an active mobile money account and mobile-based funeral insurance policy. He is 100% financially included but is this the inclusion we want? Is it sustainable? Is it humane?
It is a fact that retirement training won’t guarantee a perfect retirement, it is my view that it increases the likelihood that the retirees would be financially literate as well as financially and psychologically prepared for the rigidities of not being active in the workplace anymore. If this training is done at least three to five years before the date of retirement, it can prepare the pensioner on what to expect and even recalibrate savings to be in line with the new reality. My dad always complains: “what can I do with these few dollars that I get from my pension? I would rather drink and not stress myself.” The funny thing is in my neighbourhood there is a maid who earns half of my dad’s pension, but she has done wonders in her rural home. The answer lies in financial literacy towards and during retirement.
Way forward
It is high time that all employees that contribute towards a pension get some form of financial literacy training from their pension fund managers. Government, social security and even private pension fund managers have a duty to train and prepare would-be pensioners. Such training may even include small business ideas that can keep pensioners occupied. The elderly also need health cover once they retire, as well as affordable funeral cover. Pensioners may even consider voluntary work with NGOs and many other local organisations just to keep their minds busy and this can be negotiated and signed at fund manager level with all willing organisations.
Workers that have given serious time and thought to what they will do after they retire will generally experience a smoother transition than those who haven’t. Let’s help them enjoy retirement. They should not spend too much in betting houses and bars.
Munyaradzi Nyakwawa is a digital financial services consultant and financial inclusion analyst. He can be reached on munyaradzi.gerald.nyakwawa @gmail.com or on LinkedIn
