Stokvels have come a long way from being a proudly South African saving scheme among communities that pull funds together for a variety of purposes.

As inflation, electricity and petrol prices surge due to global economic factors including the ongoing war in Ukraine, stokvels are becoming increasingly popular across cultures as a savings network.

According to Wikipedia, “stokvels are invitation-only clubs of 12 or more people serving as rotating credit unions or saving schemes in South Africa where members contribute fixed sums of money to a central fund on a weekly, fortnightly or monthly basis.”

Stokvels are run by a fixed set of rules agreed on by its members which organises the fund according to:

. The size/value of the contributions

. When the saved money is to be paid out

. The roles and responsibilities of the members.

With each month or rotational cycle, like a birthday for instance, a different member receives the money in the fund, which was collected during that period.

Regular meetings to manage an ongoing stokvel is a logical necessity to establish fair pay-outs according to contributions made by each member receiving their turn. Such meetings will establish (and serve as a reminder of) what a member will gain when it is their turn.

“Depending on the type of stokvel, members can use the collected funds for their own use, for payment or investment purposes,” Wikipedia continued.

It is estimated that one in every two adult South Africans is a member of at least one of 800 000 stokvels. South Africans invest approximately R50 billion in stokvels per year.

Historically, the name “stokvel” originated from the term “stock fairs”, as the rotating cattle auctions of English settlers in the Eastern Cape during the early 19th century were known.

Stokvels are regulated by the National Stokvel Association of South Africa (Nasasa), a self-regulatory organisation approved by the Prudential Authority. Nasasa is also a registered financial cooperative.

It’s an organisation mandated to represent the interests of the stokvel sector, as contemplated in Government Gazette 37903. In terms of the Banks Act 1990 (Act No. 94 of 1990), a Stokvel group is required to be a member of Nasasa or a similar body approved by the Registrar of Banks.

It is deemed essential to have any stokvel registered under Nasasa to ensure checks and balances. Additionally, one can only imagine how stokvels are vulnerable to one or more potentially corrupt members who might take the collective loot for themselves and disappear.

Local stokvel saving schemes

A documentary filmmaker from Mbekweni, Bulelani Ndzuzo, told the Paarl Post that he and a group of 12 carefully selected individuals share a stokvel focused on birthdays.

He explained: “The 12 members’ birthdays are prioritised from January to December. We each contribute R100 per month, which means R1 200 is saved each month in our stokvel, which is awarded to the birthday boy or girl.

“That money can be used for anything like buying a cake, a big present or for hosting a braai where everyone celebrate together.”

Among other uses, stokvels have also been arranged to accommodate large families’ grocery needs. They include monetary contributions as well as coupons on discount savings or point credit systems, like Pick ’n Pay’s Smart Shopper points.

Stokvel is new slang for saving clubs

Francois Theron, fellow administrator of the Wellington Action Group on Facebook, shared a post in which he urged local communities to consider forming “savings clubs”, as he liked to call it.

He said: “The idea and awareness surrounding stokvels came on my radar due to a group of ten confidential Wellington businessmen who formed a savings club to benefit local initiatives.”

Theron explains this particular stokvel formed by local businessmen builds a fund over a period of two-to-three months.

“A large sum of, let’s say, R1 000 is saved by each business per month,” he said, “which obviously grows to considerable amounts of more than R10 000 once the saving cycle ends. The sum total of each cycle is then awarded to a locally identified cause or charity.”

Theron argued that this could be an alternative to orthodox NPO or governing financial structures.

“Depending on the club’s make-up and capacity, larger sums of money could be awarded to any individual, project or campaign. This could be contributed or invested into the improvement of a local community at large.”