Stokvels are the in thing

ALTHOUGH THEY’VE BEEN AROUND The great thing about them is that they can be used as a fi­nan­cial so­lu­tion to al­most any­thing.

The Citizen (KZN) - - BUSINESS - Munya Du­vera

In South Africa, as in many other coun­tries, there is a reg­u­la­tor known as the Fi­nan­cial Sec­tor Con­duct Au­thor­ity (FSCA). This body is charged with en­sur­ing all col­lab­o­ra­tive ve­hi­cles or col­lec­tive in­vest­ment schemes (CIS), as the FSCA calls them, are reg­u­lated for rea­sons such as fraud, money laun­der­ing, scams, and etcetera.

And although these reg­u­la­tions have en­sured that the South African col­lab­o­ra­tive in­vest­ment mar­ket is sound and rarely with in­ci­dent, they have proved too com­pli­cated for the lay­men to par­tic­i­pate.

But as peo­ple have shown count­less of times in history that where there is a will there is a way, and the way around the FSCA was and still is the in­fa­mous stokvel.

Stokvels have grown from strength to strength in South Africa with an es­ti­mated mar­ket value of R50 bil­lion yearly, through at least 800 000 ac­tive stokvels.

Why? Be­cause stokvels are a great col­lab­o­ra­tive fi­nan­cial ve­hi­cle with far less strin­gent rules that are im­posed on so­phis­ti­cated CIS. Ad­di­tion­ally, they are rel­a­tively sim­ple to set up and man­age es­pe­cially with big com­pa­nies in the bank­ing, re­tail, and in­surance sec­tors of­fer­ing tai­lor-made man­age­ment so­lu­tions to them.

The great thing about stokvels is that they can be used as a fi­nan­cial so­lu­tion to al­most any­thing. In the past, stokvels were pri­mar­ily used as burial funds for par­tic­i­pat­ing mem­bers, but to­day we see gro­cery, small busi­ness, party, bor­row­ing, and prop­erty stokvels of which in the com­ing weeks we shall un­pack the ins and outs of this boom­ing mar­ket and how you as a busi­ness owner could pos­si­bly par­tic­i­pate in this col­lab­o­ra­tive evo­lu­tion of fi­nance.

Munya Du­vera is CEO at Du­vera El­group

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.