Stokvels are popular saving schemes in SA
CONTRARY to many reports, South Africans are saving — and they’re not just doing it the Western way, said Mamapudi Nkgadima, managing director of African Response.
A stokvel is one of the most popular savings vehicles, with members investing more than R44 billion each year, said Nkgadima.
While South Africans generally have low levels of personal savings, stokvels make it easier for people to save, said Audrey Mothupi, head of inclusive banking at Standard Bank.
According to the Reserve Bank, households saved an amount of R72 billion, indicating a savings rate of 1,7% over five quarters to June.
Mothupi said stokvels encourage savings discipline, because they are group savings schemes.
“They allow people to meet their financial needs … in a way that suits their lifestyles.”
She said members also get to share their financial lessons with others because of the group setup.
The latest research by African Response showed that in 2011 the average stokvel had 27 members and each member contributed about R210 a month.
Nkgadima said the survey, which will be repeated this year, cut across race, age and socioeconomic barriers.
She said the study proved that people are saving, but that they are just not using Western methods.
“The backbone of stokvels is based on trust,” Nkgadima said.
However, she also cautioned that at times members borrow money, which incurs interest, to pay their stokvel in order not to disappoint other members.
The last study found there are 350 000 savings stokvels, with a membership of 5,4 million people saving about R25,41 billion annually.
At a subsistence level, 129 000 stokvels accumulate about R4,65 billion a year for the purchase of groceries for 2,3 million people.
There are at least 38 000 investment stokvels, serving an es- timated 1,7 million members investing R2,16 billion in different instruments, including savings accounts.
One of the interesting observations outlined by the survey found that stokvels are also used by the youth.
Birthday stokvels are made up mostly of younger members, with 66% falling into the 16 to 34 age category.
Over half of stokvels ( 66%) have a stokvel bank account where contributions are deposited and saved.
“They are, therefore, an important part of the local economy and will continue to be so for the foreseeable future,” said Mothupi. — Fin24.