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.

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