By: Natasha Archary
South Africans have a secret weapon when it comes to their financial stability: stokvels.
Whether you partake in one like Skhumba or feel like it’s unreliable like Thomas, there’s no doubt that a stokvel can be beneficial. Without the added interest, tax and other bank add-ons, these investments can take the weight off financially strapped households.
Did you know that 11.4 million South Africans are part of stokvels? According to the National Stokvel Association of South Africa, around R44 billion is pooled annually in stokvels.
The money goes into an estimated 820 000 stokvels and there are different types of stokvel, but most involve contributing money together, so that one person at a time benefits from it.
For Thomas, “UmUnTu NgU ‘mUnTu NgA bAnTu” is too much admin.
If he wants to travel at the end of the year for example, he’s not going to start a travel stokvel with 5 other people. Instead he’s going to start saving for himself, so that by the end of the year he has enough to make a trip to the UK to visit his sister.
But, for many South Africans stokvels provide some respite and takes the financial pressure off families especially during the holidays, back to school or for auspicious family occassions.
The book, Stokvels: How they can make your money work for you, provides a good framework for anyone who wants to start a stokvel of their own.
Written by Palesa Lengolo, the reader will learn how the collective power of the stokvel can be used.
Readers will also learn:
- how this collective power emerged;
- how to set up a stokvel and the admin involved in running one;
- the opportunities within stokvels and the possible collaborations with other institutions;
- real people’s experiences with stokvels; and
- the challenges and future landscape of stokvels.
Apart from a travel or study stokvel, most people pool together to start stokvels for December groceries, back to school supplies including stationery and burial stokvels.
Listen to the conversation on Thomas and Skhumba In The Morning:
Benefits of a stokvel
- Stokvels makes saving easier, with positive encouragement from peers driving you to your goals.
- A community pooling together resources makes you earn higher interest in banks, compared to what you’d earn if you were saving alone.
- They build a sense of community and socialising.
- Saving for a specific goal makes it easier to plan your finances.
