Lifecycle effects on consumer financial product portfolios in South Africa: An exploratory analysis of four ethnic groups

This paper assesses ownership of 16 financial products by households in different lifecycle stages amongst four ethnic groups (Africans, Coloureds, Asians, and Whites) in South Africa. The lifecycle hypothesis indicates younger households should own more debt-related financial products, whereas households in intermediate lifecycle stages should own more financial products to accumulate assets; both these claims are disconfirmed for all groups. However, White households in intermediate household stages own more financial products than younger and older households, consistent with previously reported lifecycle findings in Western countries. Consistent with the literature on innovation adoption we find that younger, affluent and highly educated households amongst the other three ethnic groups tend to own more financial products than older Africans, Coloureds and Asians. These results indicate that innovation adoption literature may better describe financial product ownership in developing countries than the lifecycle hypothesis.