Fundisa Fund launched
12 November 2007
At a reception attended by the Minister of Edcation today, the Fundisa Fund, a savings scheme for further and higher education, was launched.
A public-private partnership between the Department of Education and the Association of Collective Investments, the Fundisa Fund encourages lower income earners to save for their children’s further education at either a public college or a university.
Savers are able to open Fundisa Fund savings accounts from today. Savers will receive up to a quarter of what they save each year as a bonus. For example, if R1,200 is saved a year, the fund will add another R300 to the saved sum.
In her budget speech on 29 May this year the Minister of Education, Naledi Pandor MP, committed R20 million to a three-year pilot project to test if there is demand for a savings scheme like the Fundisa Fund.
The Minister of Education said:
“If the pilot scheme is a success, we’ll be able to expand Fundisa’s reach. We will not see the impact of Fundisa for many years, but when children begin to redeem their Fundisa funds, we’ll be able to see how far sighted we’ve been. In future, I hope that qualifying families will be able to draw on a combination of their Fundisa savings and NSFAS funding to support their children’s higher education. It is a future that will bring new hope to many of our people.”
Investors must have a Mzansi or similar account and be South African citizens. They will be able to access Fundisa through most collective investment companies as well as Absa, Nedbank, Standard Bank and the Post Office.
Chief Executive of the Association of Collective Investments Di Turpin said:
“Education is a key factor in promoting wealth generation and higher living standards and we believe Fundisa can play a meaningful role by incentivising families to plan for a child’s education beyond basic high schooling.
“South Africa needs to take urgent action to reverse the dismal savings rate and Fundisa is one of the iniatives being launched by the industry to encourage a savings habit. Collective investments because of the low costs and highly regulated environment are an ideal vehicle for savings.”
The Collective Investments industry will work closely with the National Student Financial Aid Scheme (NSFAS). Fundisa will be complimentary to existing funding mechanisms provided by NSFAS in the form of accessible student loans for qualifying low-income families.
The Fundisa investment portfolio will invest in low risk instruments such as money market securities, bank deposits and government bonds. In the longer term the fund may consider offering an equity option giving investors the opportunity to earn the higher returns of equities for beneficiaries who are very young and therefore have a long investment horizon.
Issued by the Ministry of Education
Lunga Ngqengelele
Ministerial Spokesperson
01 2 312 5538
082 566 0446
ngqengelele.l@doe.gov.za