Role of stokvels in economy highlighted at indaba

STOKVELS and burial societies, which command about R44bn between them, should play a more meaningful role in the economy, Thabiso Masudubele, the founder of the Stokvel and Burial Societies Indaba, said on Wednesday.

Informal savings — in the form of stokvels and burial societies — outpaced other forms of savings for the first time in three years, accounting for nearly 80% of the savings vehicles used by respondents to insurer Old Mutual’s Savings and Investments Monitor released in July.

This was among six other savings vehicles they had used, with retirement annuities ranking the lowest in the index.

The number of respondents who said they were not saving for retirement rose to just more than 40% this year.

“We have this misconception that there is this market in the township and there is a mainstream one,” he said in an interview with Business Day.

“How do the likes of Pep and Shoprite make their money? They need to draw in stokvels.”

Presenting the survey results to the indaba, Old Mutual strategy executive Lilian Mathe indicated 88% of informal savers were black, and the savings vehicle was not limited to the “mass market”.

The survey results showed more people in high salary bands — earning more than R40,000 a month — belonged to stokvels, outranking their South African lowerincome counterparts.

Masudubele said stokvels should “know their strength”.

“If [they] have R3,000 a month, let’s invest it in the JSE.”

Masudubele called on financial institutions to create products stokvels needed, not the products these institutions wanted to sell.

But Julian Sikhuzu, head of strategy at Old Mutual, said this could be difficult.

“You have thousands of burial societies ... the rules are different,” he said.

“It is up to you to go out in the market and find the product that is best for you.”