Stokvels still relevant to our society

By Sisandile Cikido

South Africa’s most traditional savings methodology is surging into the 21st century, but a cautious approach is required to ensure that members are protected. The more things change, the more they stay the same. One could argue that this is particularly true when it comes to the evolving world of the stokvel, that quintessentially South African institution created by marginalised communities to create some level of financial security and, increasingly, to build wealth.

‘Stokvel’ derives from the English word ‘stock-fair’, a livestock auction and farmers’ gathering. It was at such gatherings in the Eastern Cape that farmers and their employees came together to socialise, and often to pool money to purchase livestock. Somehow, ‘stock-fair’ became

‘stock-fele’ for speakers of isiXhosa, and eventually mutated into something that sounds Afrikaans.

This concept was introduced to the goldfields by migrant workers from the Eastern Cape. It became an essential tool for marginalised communities to save and socialise.

● Fundamentally, stokvels are mutual savings societies. The most common of them is contribution based, with members receiving a lump sum in rotation. These contribution stokvels can often be linked to specific goals or purposes — to buy groceries over the Christmas period, or bigger expenses like furniture and funerals.

● Ultimately, one can characterise stokvels as vehicles for saving towards a common goal. There’s an estimate of more than 800 000 stokvels in the country, and they are responsible for savings of more than R44 billion a year – a significant