A Groundbreaking MDPI Study on Gen Z Financial Literacy

Generation Z university students in South Africa are navigating a complex financial landscape marked by high access to banking services but varying levels of practical financial skills. A newly published study in the Journal of Risk and Financial Management reveals that financial inclusion—defined as access to useful and affordable financial products and services like bank accounts, mobile money, and credit—significantly enhances financial knowledge, capabilities, and overall literacy among these young adults. Titled "From Access to Ability: The Impact of Financial Inclusion on Financial Knowledge, Capabilities, and Literacy Among Gen Z University Students in South Africa," the research conducted by Damien Kunjal from the University of KwaZulu-Natal provides empirical evidence from 428 students, underscoring the transformative potential of inclusive financial systems in higher education contexts.

This cross-sectional study, published on March 1, 2026, challenges the assumption that mere access equates to competence. While South Africa boasts a 91% financial account penetration rate as of 2021, the study highlights nuances where high inclusion does not always translate to applied skills, particularly for non-commerce students.

Defining Key Concepts in Financial Human Capital

Financial inclusion refers to the delivery of affordable financial services to disadvantaged and low-income groups, enabling them to participate fully in the economy. Financial knowledge involves understanding basic concepts like interest rates, inflation, and risk diversification. Financial capabilities encompass the practical skills to apply that knowledge, such as budgeting, debt management, and long-term planning. Financial literacy integrates these elements into confident decision-making.

In the South African context, where youth unemployment hovers around 45% and student debt via schemes like the National Student Financial Aid Scheme (NSFAS) is rampant, these competencies are crucial for Gen Z—born between 1995 and 2012—who form a digitally native cohort reliant on mobile banking and fintech.

High Financial Inclusion Amid Moderate Capabilities

The study's descriptive statistics paint a promising yet incomplete picture: financial inclusion scored a high mean of 4.40 out of 5 (SD=0.70), reflecting widespread bank account ownership and digital payment use. Financial knowledge followed at 3.89 (SD=0.76), but financial capabilities lagged at 3.49 (SD=0.80), indicating gaps in practical application. Overall financial literacy averaged 4.07 (SD=0.73).

Partial least squares structural equation modeling (PLS-SEM) confirmed positive paths: inclusion to knowledge (β=0.341, p<0.001), to capabilities (β=0.179, p<0.001), and to literacy (β=0.255, p<0.001). These results suggest that access builds foundational understanding but requires reinforcement for behavioral change.

Gender and Field-of-Study Heterogeneities

Multi-group analysis revealed stark differences. Female students (56.8% of sample) exhibited higher means across all constructs and stronger inclusion effects compared to males. Commerce students (52.3%) benefited comprehensively, with inclusion boosting all dimensions, while non-commerce peers saw gains only in knowledge, not capabilities or literacy.

• Females: Stronger β paths, e.g., inclusion to literacy (higher significance).
• Commerce: Full mediation via knowledge to capabilities.
• Non-commerce: Limited to theoretical gains, highlighting curriculum needs.

These insights call for targeted interventions in South African universities, where African students (78.7% of sample) dominate but face socioeconomic barriers.

Photo by Jolame Chirwa on Unsplash

South African Higher Education Context

South Africa's higher education sector enrolls over 1 million students, many funded by NSFAS, which provides allowances for tuition, accommodation, and living costs. Yet, recent reports highlight mismanagement: students diverting funds to online gambling, prompting NSFAS and the National Gambling Board to launch awareness campaigns in February 2026. With youth financial literacy averaging below 52/100 nationally, university students are vulnerable to debt traps despite high inclusion via apps like Capitec and M-Pesa equivalents.

Gen Z students at institutions like UKZN manage bursaries and part-time jobs, but inconsistent NSFAS payments exacerbate risks. For career starters, strong financial skills correlate with better job prospects in finance sectors; explore higher ed jobs in South Africa for opportunities.

University-Led Financial Literacy Initiatives

South African universities are stepping up. The Momentum Group Foundation partnered with Universities South Africa in October 2025 to scale programs like Motheo Financial Dialogues for final-year students, covering budgeting and investing. University of Johannesburg offers the online "Financial Literacy: Be Money Wise" course, while Wits provides Blackbullion SA modules for alumni.

UKZN, home to the study, integrates financial education into curricula. Other efforts include Absa and JSE programs reaching thousands. These align with the Financial Sector Code, emphasizing blended learning.Universities South Africa Partnership

Challenges: NSFAS Mismanagement and Gambling Surge

NSFAS supports 1.4 million students but faces scrutiny for delays and misuse. In 2026, Minister Godongwana criticized mismanagement, while partnerships with the National Gambling Board aim to curb betting with stipends—funds meant for education. Erratic payments fuel quick-win gambling, undermining literacy gains.

Gen Z's digital savvy aids inclusion (44% use Capitec primarily) but exposes them to fintech risks without capabilities. Universities must bridge this via mandatory modules.

Implications for Higher Education Policy

The study urges complementing inclusion with education, especially for non-commerce fields. Policymakers could mandate financial literacy in NSFAS orientation or curricula, targeting males and STEM students. This supports National Development Plan goals for skilled youth.

For academics, integrate PLS-SEM insights into research; rate professors excelling in finance via Rate My Professor. Institutions like UKZN exemplify progress.Read the Full MDPI Study

Photo by Clodagh Da Paixao on Unsplash

Future Outlook and Actionable Insights

With Gen Z optimistic (72% positive outlook), fintech growth offers hope. Universities should:

• Embed financial modules in all degrees.
• Partner with banks for experiential learning.
• Monitor NSFAS via literacy assessments.
• Leverage AI for personalized advice.

Stakeholders: expand Momentum programs; students, prioritize capabilities. For finance careers, visit higher ed career advice and university jobs in South Africa.

Conclusion: Empowering Tomorrow's Leaders

This MDPI study affirms financial inclusion as a catalyst for literacy among South African Gen Z university students, but education is key. By addressing gaps, universities can foster resilient graduates. Explore faculty roles at higher ed faculty jobs, review courses via Rate My Professor, or seek advice at higher ed career advice. South Africa's higher ed sector stands ready to build financial futures.