Stokvels are traditional community-based savings clubs that have largely been utilised, particularly among lower-income communities, pooling resources towards common or different goals.

Last year, IOL reported that South African stokvel savers are showing their resilience and determination as they continue to stash away billions of rand in savings despite the tough economic climate.

At the time, FNB revealed that, since November 2019, its customers’ stokvel deposits had increased by 42 percent, surpassing the R8,3 billion mark in total member contributions.

Across the country, savings through stokvels are estimated to be valued at almost R50 billion a year.

On the other hand, Standard Bank, citing data from the National Stokvel Association of South Africa (Nasasa), said there are over 810,000 active stokvels in South Africa, which collect an estimated R50 billion in savings annually from more than 11 million members.

Speaking to IOL, chairperson of Sakhisizwe Property Stokvel, Silindile Leseyane, said stokvels have been around for many years, primarily focusing on short-term savings and death benefits for their members.

“As the stokvel industry is estimated at R52 billion, the missed opportunities are meaningful investments and opportunities to participate in the economy in a meaningful way,” she said.

“The challenge is most stokvels have a short-term focus and don’t have the long-term view that is required to create real impact. They are also mostly informal, and therefore this also has an impact on the longevity of the stokvel.”

She suggested stokvels would do better by being formalised, and taking fractions of their savings, ploughing them into meaningful investments.

“This would have a great economic impact for them, their families, and their communities,” she said.

On the other hand, a seasoned entrepreneur, author, and stokvel expert, Busi Skenjana, told IOL that the stokvel ecosystem is fraught with challenges and misconceptions, but if done professionally, the venture can be rewarding – and she has the lived experience.

Skenjana has penned a book titled: “Stokvel Voices: The Truth, the Illusions, and the Opportunities”.

“I would say around stokvels, there is a lot of movement, the ground is actually swelling into the future,” she said.  

“Being a member of a stokvel myself, I think people could do better. In the book, I have covered about five stokvels, some of which I belong to. I have actually rated the stokvels – there are about two or three which I give a high rating, according to my assessment. There is still a lot that they could do better.”

Skenjana told IOL that there is a need for financial education for members of stokvels and a departure from the mindset of consumerism, where all the savings are destined to be devoured at a given time, or when a target figure is reached.

“You find that many stokvels are consumer oriented, as opposed to long-term investments. For me, that is something that is glaringly not right. The emphasis is on consumerism, as opposed to how we can, together, build wealth as a community, and to address the economic imbalances,” she said.

“We all know the origins of stokvels, which was to try and minimise the economic blow that people suffered through the apartheid era. I still find that there is more of the social and quick disposable money – we save R50,000 which we later distribute among members, blow it then we start all over again. That is wrong and an area of concern.”

In her lived experience, Skenjana said she has been part of formalised stokvels, which have managed to make meaningful investments into property and other significant undertakings.

She insisted that there are opportunities for young people to come together and make considerable investments as groups, which will help them in their twilight years.

“I have become a gogo and still a member of a stokvel. Gogo does not join a stokvel in her advanced years. No, one joins from their 20s and grows like that. People look at the aged people in stokvels and forget that these people became members of the stokvel when they were young. Some people have been in stokvels for more than 50 years, literally. 

“I was speaking to a woman who told me that in their stokvel, they were celebrating the 50th anniversary. Personally, I think I was around 25 years old when I joined the stokvel, and I am 68 years old. I am still a member of two stokvels.”

Skenjana said she is a proud member of stokvel formed around 1998 which is formally referred to as an investment club, a registered company. 

“The model was a stokvel. Ten of us came together and we decided to buy a holiday home in Mpumalanga, and we converted the stokvel into a company. We have been owning that property since 1998, and it is what I can call passive income generation,” she told IOL.

“Note that the property we purchased as a stokvel is an inheritance for our children. This is something that I am trying to preach, this is not about me. Two of our fellow members have passed away, but their children are still benefiting from that stokvel. That is how we have structured it.”

IOL has previously reported on incidents where members of traditional stokvels have been robbed while gathered in a house to share money, or of unscrupulous members fleeing with other members’ savings. 

Skenjana said in this era, systems are digitalised to avoid the common pitfalls of dealing with cash.

“My advice is, stop handling cash. Even in our personal lives, it is not safe to be walking around with lots of cash in your handbag or in your back pocket. My advice to stokvels is that they must use the banking system. Banking is fairly accessible in South Africa now, unlike the era when stokvels were initially formed. People have to deposit directly into bank accounts. When it is time to share, at the end of their cycle, they should just do transfers,” she said.

“Handling cash is a no no. Unfortunately, it is still happening with the older generation, because some still say it feels good to have to touch the money physically, to see and feel the paper.”

Skenjana said commercial banks have a lot of work to do in terms of guiding the stokvel members on investments.

“Quite the bulk of stokvel money is sitting in bank vaults. Members of stokvels save with the four major banks in South Africa. Having been part of the stokvel terrain, I have even established a stokvel academy. I am still to see a bank that says, we are committed to educating these stokvels. They love these stokvels for their databases, and they try and harvest as many stokvels as possible,” she said.

“In terms of financial education, it is still lacking.”

In December, IOL reported that the provincial commissioner of police in Limpopo, Lieutenant General Thembi Hadebe, has warned community members, particularly social clubs or stokvels, against carrying large amounts of money, as they can be targeted by criminals and robbed.

The appeal was made by the provincial police commissioner following a house robbery where a mother and daughter were robbed.

“A 54-year-old female victim fell victim to a house robbery involving a social club’s money at Strydkraal Block A village under the Sekhukhune district on 9 December 2024, at about 10 pm,” Limpopo provincial police spokesperson, Colonel Malesela Ledwaba, narrated.

He said preliminary investigations revealed that members of a local social club held a meeting at the victim’s residence to discuss how they were going to distribute the money they had saved. That meeting started at around 3 pm.

“The meeting concluded at approximately 7 pm, and the members of the social club departed to their homes and left the victim with her teenage daughter,” said Ledwaba.

“At about 10 pm, three unknown male suspects instantly broke into her house and robbed a substantial amount of cash belonging to the social club and later locked the two victims inside one of the bedrooms before fleeing the scene on foot.”

The traumatized mother and daughter were later rescued by a relative. The matter was then reported to the police.

jonisayi.maromo@iol.co.za

IOL News  

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