THE MEDIATING EFFECT OF FINANCIAL EFFICACY ON FINANCIAL KNOWLEDGE AND BEHAVIOUR AMONG SOUTH AFRICAN CONSUMERS

Abstract

Financial knowledge alone may not be sufficient to promote positive economic behavior among South African consumers; financial self-efficacy may be required to exercise positive financial behavior. This study investigates the mediating effect of financial efficacy on South African consumers' financial knowledge and behavior. This investigation utilized a quantitative research design and the Human Sciences Research Council database. The research sample included 3,500 South African consumers aged 16 and older from nine provinces. The Human Sciences Research Council (2011) utilized a closed-ended questionnaire to collect data on South African consumers' social attitudes toward financial literacy. This study tested its hypotheses using inferential statistics such as Pearson's product-moment correlations and regression analysis. Few consumers rated themselves as extremely knowledgeable about finances, with the majority rating themselves as merely knowledgeable. In terms of regression findings, it was determined that financial knowledge has a direct relationship with economic behavior and an indirect relationship with financial behavior via financial self-efficacy. This result indicates that financial self-efficacy mediates some relationships between financial knowledge and financial behavior. It was suggested that financial educators enhance consumers' financial knowledge to increase their self-reported financial knowledge. In addition, once consumers' self-rated financial knowledge improves, they will likely have higher levels of financial self-efficacy, resulting in better economic

behavior. In addition, consumers must cultivate positive financial practices to promote positive financial behavior and high financial self-efficacy levels. This study demonstrates the importance of financial self-efficacy in enhancing the economic behavior of South African consumers.