The State of Small Business

The hidden treasure in Stokvels!

By Mzukona Mantshontsho
Stokvels are a major source of investment for many South Africans. The tragedy is that South African banks treat all stokvels uniformly and do not closely look at the specific needs to see how they can help address each stokvel’s needs.
The idea of stokvels is often associated with the ‘black community’ and I am not sure why? The definition of a stokvel is a group of people coming together to collectively share their aspirations, basic things in life, facing their personal and family challenges and fulfilling their dreams.
Taking one back, the Old Mutual Savings and Investment Monitor in 2013 revealed that stokvels had 11.4 million members and the estimated value of the stokvel market in South Africa was at R45.1 billion per annum. It was however very disappointing to learn from the same investment monitor that South Africa’s savings rate was just under 16% of GDP, compared to 34% in India and about 20% in Russia our BRICS friends.
Raymond Berelowitz, Director of Marketing at Old Mutual, said more South Africans were struggling with debt and were cutting back on their savings, including what parents are putting aside to educate their children, with possibly devastating consequences for generations to come.
Although South Africans were notorious for the culture of not saving, it is only stokvels that have managed to successfully instill a compulsory saving culture in many South Africans through their savings clubs.
Berelowitz said the most popular savings vehicles for those who do not save are funeral policies, at 65%, and pension or provident funds, at 56%. Stokvels are used by 65% black households.
Stokvel life-spans vary, there are stokvels that last a year and others have been around for more than 15 years. “I remember another group we had with 10 friends to invest in buying property, from our personal savings we bought a chalet at Kruger Park Lodge in 1998 and I am happy to say that the lodge still exists. Not to sound negative towards the banks, none of the banks in the country have a database of all these stokvels so that they can cater for their individual needs,” says stokvel member Sandra Thomas.
“These banks as I see it, do not take the time to find out why these groups are being formed so that they can segment them accordingly and offer targeted needs. The money sits in the bank account for however long and nobody cares to make suggestions of how the funds could be used to add more value to the banks and the stokvels,” she added.
Speaking to Branch Manager at Nedbank Kacey Govender, he said: “As much as they have society scheme accounts; the focus is hardly ever given to understanding the consumers’ needs. “So yes, more could be done to segment the stokvels and address their individual needs”.
Stokvels have become a major force for investment. Banks should be looking at these numbers.
Image: Forbes Africa!


Mzukona Mantshontsho is the founder of Nyakaza Media Solutions. Nyakaza Media Solutions is an organisation that was established to help community organisations, business entities, and schools to research, write, document, report, analyse, edit, publish newsletters or bulletins in hard-copy, on-line and maintain websites with the relevant content as per the editorial policy of that organisation, school or entity. Nyakaza Media Solutions has a vision to promote and bring dialogue to communities, businesses and schools about issues that affect them. Nyakaza Media Solutions is on a mission to develop and encourage communities, businesses and learners to celebrate the good, applaud excellence, welcome growth, strive to be better individuals, businesses and communities, want more knowledge, discourage bad and counter-productive behaviour as well as communities, businesses and learners that want to be great SOUTH AFRICANS. Nyakaza Media Solutions is making use of Yo School Magazine as a platform that learners in all schools to make use of to write their stories.

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