Understanding stokvels

EVOLVING WITH TIMES: FROM MONEY COLLECTED MONTHLY TO MOVING INTO RETAIL SPACE They act as a safety net for millions of South Africans who can’t access credit.

Understating the evolution of stokvels, from money being collected monthly, to moving into the retail space can be confusing. Cape Talk speaks to Massmart Holdings and looks at the origins of stokvels, saving through them and the advantages for consumers and retailers:

Where does the concept of stokvel originates from and how big is in South Africa?

The word “stokvel” originated with the 19th-century cattle auctions or stock fairs but has evolved into a powerful buying and savings tool in South African township communities.

Stokvels are traditional community-based savings groups. They are invitation only clubs of about 12 to 50 people. Each member contributes a sum of money each month into a common pool. The savings is then used to help the members pay for everything from white goods and groceries to burials, school fees and loans.

Stokvels are well-organised with selected members, treasurer and chair. They have a very low default rate on contributions. Stokvels are therefore stable because they are deeply rooted in existing community.

Stokvels act as a safety net for millions of South Africans who can’t access credit from formal financial services.

How big is the stokvel industry in South Africa and what type of Stokvels do you get?

According to 2019 statistics: SA has over 11.4 million individual Stokvel members. There are over 811 000 known stokvels in South Africa. The value of the stokvel industry is over R56 billion a year. Grocery portion value: R11 billion a year (26% of stokvels).

The 2022 South African township survey data indicates:

58% of township residents participate in at least one stokvel; Nearly 40% of South Africa’s adult population belong to one or more stokvel group; and

19% of township residents contribute to four stokvels on a monthly basis.

Types of stokvels:

Grocery stokvels are one of the biggest types of stokvels groups parties.

Purchasing stokvel – which is formed to big ticket items that can be used by the group to generate an income such as a marquee to rent out.

Contribution stokvel – which is a traditional savings scheme where members receive the lump sum on a rotational basis and can use the money for any purpose. These can be big or small groups.

Family stokvel – which invests money in formal bank accounts for financial services. The money is paid out according to the needs of the family, but generally the funds are used for buying land or cars, business investments or deposits on bank loans.

Investment stokvel – which invests money in order to benefit from the interest. When an investment is paid out the money is either divided up or reinvested.

Party stokvel – which arranges parties where entrance fees are charged, and refreshments are sold – profits are split among the members.

How does Makro and Masscash (which is the Cash and Carry, Jumbo, Browns) support the stokvel groups in South Africa:

We have a wide variety of quality products on offer to the stokvel members under one roof.

The range includes – food, meat, fresh and general merchandise (and also liquor as there are alcohol stokvels nowadays).

At Makro and Cash & Carry, each stokvel has a card that identify the stokvel in the business.

As a business, we attached value added service and benefits to this cards and all the stokvel will have to do to also be part of these benefits is to visit their closest store and register their stokvel at the reception desks in these stores.

We offer the members a safe way to save their stokvel money with our stores by depositing money in-store or at a bank using the relevant reference number provided and weekly and monthly statement will be e-mail to the stokvel coordinator to confirm the amount saved.

We have full stokvel programme that runs through the year which include: trolley bashed; competitions; annual stokvel events (parties) in October, with lots of goody bags and free products where we provide pricing to assist stokvel to decide what they will be buying in November;

The biggest benefit is the exclusive stokvel pricing linked to these cards;

To add to the above – we have additional discounts if the stokvels come and purchase during the week;

Stokvels can also book deliveries with the stores in order to assist in getting the product home;

And to make it easy for the stokvels to split their purchases, we have dedicated areas to facilitate this process, plus stokvels can enter the stores via bulk/staff entrance to improve the shopping experience;

So just come and visit our stores to register you as a stokvel or go on to Makro website to guide you of our offerings;

We also have a gift card solution but only in Makro where the monies saved can be loaded on a gift card for each member and they can go and purchase the product they choose; and

Call centre: 086 300 999 or

www.makro.co.za – Cash and Carry stores stokvel members will have to go into the closest store (22 Makro’s and 36 Cash and Carry). Food top purchase lines in Makro: Sunflower Oil 2lt; Lucky Star Pilchards 400g; Koo baked beans; Snowflake;

Tastic Rice; Mayonnaise 750g; and Sunlight liquid.