– Keep out
president of the National Stokvel Association, as “a type of credit union in which a group of people enter into an agreement to contribute a fixed amount of money to a common pool weekly, fortnightly or monthly” – are nothing new in SA. The f irst stokvel is recorded as having been established in 1932, according to Ntoyiwa, and from then on, “stokvels have been stereotyped as structures for the poor black community” but also as “societies for the older generation”.
Yet despite these perceptions, stokvels continue to grow in size and are being successfully used as investment vehicles for South Africans who prefer to place their trust in their communities instead of formal financial institutions.
“Many South Africans prefer stokvels because of the liquidity of these funds, no forms are needed, and there are no fees involved,” explains Lynette Nicholson, Research Manager at OMSA. “It’s a system based entirely on trust and the whole social aspect – the accountability to one’s community is what drives [stokvels].”
Tashmia Ismail, head of the Inclusive Markets Programme at GIBS, adds that the emotional support and strong social element associated with stokvels are “things that formal businesses can’t replicate”. Insurance companies, for example, see stokvels (and more specif ica l l y, buria l societies), as a major com-