| "Stock fairs" had it's being in the Eastern Cape in | | | | regarded and respected leaders in their |
| the early 19th century. | | | | community. The brands or corporations they |
| What started as a simple savings solution has | | | | endorse are therefore more likely to be |
| today grown into a fascinating range of stokvels | | | | embraced by their community. |
| for every possible need in life, ranging from | | | | Reasons for belonging to a Stokvel: |
| joyous occasions such as the Christmas stokvel | | | | There are many and varied reasons for belonging |
| (saving for a generous December food shopping | | | | to a Stokvel, ranging from a strong form of social |
| spree), to a hybrid of the stokvel, which lends | | | | collateral which satisfies social needs, to a form of |
| financial and social support to families. | | | | self-discipline and commitment which enables |
| A Stokvel is group savings scheme, where | | | | people to have a lump sum to use for a specific |
| members contribute a fixed amount of money to | | | | purpose or to grow their money. |
| a common pool monthly. Money is drawn either in | | | | Many stokvels members emphasise the |
| rotation or when a particular need or occasion | | | | importance of the social prestige of belonging to a |
| arises. | | | | stokvel (members are invited to join one - they |
| A stokvel is a group of friends who contribute an | | | | cannot just go and join up) and the fact that this |
| amount each month, say R 500.00. In a stokvel | | | | membership reflected common values and good |
| of 12 friends, each person gets one chance a | | | | understanding. |
| year to take home the month's collected cash. So | | | | Understanding the communities these informal |
| once a year each person in the group gets a lump | | | | schemes operate in: |
| sum of, in this case, R6 000.00. | | | | The communities in which Stokvels operate are |
| Stokvels: | | | | dynamic - there is a strong sense of Ubuntu. |
| Making Social Cents? - complexities of the cultural, | | | | Poverty and apartheid have weakened the social |
| social and financial interface of this thriving | | | | fabric of many poorer communities and there is a |
| industry. | | | | strong sense of a need to pull together and |
| Stokvel is not necessarily limited to only poor or | | | | create solutions. |
| rural South Africans. In fact, executives in urban | | | | Savings instruments for the poor tend to be time |
| areas belong to highly sophisticated stokvels that | | | | and event bound and this influences their capacity |
| generate significant income. | | | | to save and invest in the future. There is a |
| The total amount invested in stokvels annually by | | | | common misconception that the poor do not |
| this sector is estimated to be R1.3-billion. | | | | save, however they need to accumulate large |
| "In this 'ubuntu society' people look after each | | | | lump sums of money for a variety of reasons, |
| other's needs and share resources. Trust is the | | | | such as: |
| other side of the ubuntu coin, which is probably | | | | School fees Feasts (celebrations such as |
| best translated as a common humanity,". | | | | weddings, coming of age and funerals) Specific |
| Stokvel is a savings scheme by group of people | | | | item (usually furniture or appliance) Monthly cash |
| who save a regular amount each month, a | | | | flow is not enough to purchase these items |
| stokvel will enabled you to amass wealth while | | | | without savings. What is important to note, |
| avoiding the debt trap. Banks charge high fees | | | | however is that the poor DO SAVE, but in a very |
| and high interest rates, but stokvels have none of | | | | different manner. It would appear that their |
| these disadvantages. | | | | saving is Connected to a specific time Purpose or |
| Urban legend has it that stokvels are so addictive | | | | event driven With specific intent. |
| that members sometimes save enormous | | | | Consequently, this leaves them vulnerable to |
| amounts relative to their earnings. | | | | unplanned occurrences and events. It is important |
| Stokvels is a "traditional" investment vehicles. | | | | to realize the extent to which the poor have very |
| Born from a need to create a trustworthy | | | | complex financial lives - sustaining survivalist |
| environment for saving, the stokvel has gone | | | | business and entrepreneurial business are not |
| beyond the role of simply "making life easier". | | | | easy. For many households juggling their grants |
| Stokvels are about economic empowerment, | | | | and the demands of many family members on a |
| enabling enterprises to flourish; it's about job | | | | small budget is a challenging and complicated |
| creation and about developing closer relationships. | | | | process. |
| "Although Stokvels are regarded as somewhat | | | | Stokvels and other informal financial instruments |
| traditional and some would say outdated social | | | | are readily accessible, well understood and |
| structures. | | | | appropriate. Stokvels rely on |
| Research study into Stokvels examines this | | | | (a) the principle of reciprocity and |
| financially significant South African phenomenon. | | | | (b) mutual trust for sustainability If you get the |
| Why should we be interested in Stokvels? | | | | support of one member, you have the support of |
| Estimates are that the total investment in | | | | all, BUT the converse is also true: |
| Stokvels and Burial Societies in South Africa reach | | | | Stokvels: |
| the R1.3 billion mark. | | | | Enjoy proximity to their clients Have personal |
| Stokvels are not just the domain of a few - very | | | | relationships with their clients, therefore detailed |
| few industries are not "touched" by stokvels - | | | | and intimate information about their clients Maintain |
| directly or indirectly. Stokvels are all about group | | | | good speed in transacting business. Are more |
| affinity and networking - the group rather than to | | | | cost effective in financial intermediation - in |
| an individual. They provide a powerful and cost | | | | mobilising and deploying funds. |
| effective distribution network which yield great | | | | A critical part of this success is the breaking of a |
| influence and spending clout. | | | | cycle of vulnerability and poverty which leaves |
| Many of the strong leaders in stokvels are highly | | | | people literally living from hand to mouth. |