STOKVELS
S K N A B S V S E GROUP SCHEM HEMES AND SC P U O R G T U B , SK TA LT DIFFICU SAVING MONEY CAN BE ADEDICATION TO THIS IMPORTANT TASK STOKVELS ENCOURAGE merely for its simplicity and safe
By Andrew Lukhele
S
outh Africa’s savings rate remains low and it is even lower at household level. According to the South African Savings Institute (SASI), as many South Africans remain outside the job market, and others are overly indebted, the challenge to put aside something for a rainy day grows even bigger for ordinary citizens. Inevitably the formal sector is likely to lose its clientele, as individuals turn to the informal sector for social capital. The burgeoning research within the country reveals that stokvels are enjoying a substantial number of members and continue to play a supporting role in the lives of many South Africans.
The tendency in the townships and rural areas is for individuals who lack the discipline to save alone to join stokvel groups, burial societies or social clubs. The group phenomenon promotes peer pressure which generally ensures that the default rate among members is minimal or non-existent. The banks have capitalised on the trust factor of these groups by forming group savings schemes tailor-made for stokvels. For example, today Absa and Nedbank have products such as the Club Account, Standard Bank has the Society Scheme while the Stokvel Account belongs to FNB. It must be noted that sometimes stokvel members embrace a bank’s product
keeping. Banking money can be better than keeping money under the mattress. In fact, the now-defunct Perm Building Society’s Club Account enjoyed support because of the following simple features: The account was to be book-based; in other words; no plastic cards. A savings book can be taken to meetings and all the members shown how much money was in the account; • An account was to be provided for the club and they decided how many members and who should be authorised to sign for withdrawals, • There were to be no charges debited against the account, • A better-than-average rate of interest
