Stokvels Are Evolving, So Should Returns

Want to maximise your stokvel group savings? Read on for expert advice.

Stokvels have evolved over the years. Apart from becoming more common, they have also branched out to attract new target audiences. Originally traditional community-based savings groups to buy predominantly bulk food and groceries, stokvel groups are now being created to pay annual school fees, buy property and even invest on the JSE.

Stokvels have proved to be a very successful alternative to formal savings. The National Stokvel Association of South Africa (NASASA) estimates that the stokvel economy is worth R49-billion, made up of 11.5 million people across 810 000 stokvel groups.

But there are many stokvels in South Africa that aren’t maximising their collective saving power. In-depth research by Rudzani Mulaudzi into 36 stokvels – titled "From Consumers to Investors" – revealed that the majority of members were not aware of how the money they generated could be invested or put to better use.

Stokvels have evolved over the years. Apart from becoming more common, they have also branched out to attract new target audiences.

Having recently engaged with several stokvel groups at the Pick n Pay Community Stokvel Indaba in Durban, Papi Rapolai, the general manager for wholesale and stokvel at Pick n Pay, says that many were unaware that their money could be working better for them. “The feedback from the attending stokvel groups was very positive. The indaba empowers groups with knowledge and enables members to understand how best they can maximise returns on their savings.”

Aimed at empowering stokvel groups to take charge of their money and get more rewards for their members, Thami Cele, the head of savings & investments at Absa Retail and Business Banking, says stokvel groups were very receptive to the financial education programme information that was shared, with many opting to sign up for the programme.

“We are seeing more stokvels looking for ways to create longer-term sustainable wealth for themselves and their loved ones. At the event, we shared insights into how some of the stokvels have been able to do this – showcasing the power of people investing together. One such example is a flourishing stokvel that has taken the initiative to purchase a B&B and run it as a business.”


Cele shares his advice on how stokvel group can maximise their savings:

  1. Research the various stokvel savings solutions available in the market and compare the benefits: A stokvel group should be clear on what purpose they are saving for in order to align their needs to a product that will be the best vehicle to help them reach their goal.
  2. Save your savings securely: Avoid keeping stokvel savings as cash and where possible, arrange to do a direct transfer for purchases.
  3. Save a portion of the savings for long-term investments: This will ensure stokvel groups benefit from compound interest (interest on interest).
  4. Shop for great value: Use credible service providers when buying food and groceries. Research and engage with retailers to see what is on offer to the stokvel group. It is important that groups understand all the added value benefits available, such as a free delivery service.

Collaboration is important, concludes Rapolai. “Engaging with stokvel groups allows us to have better insights into what their needs are so we can deliver product offerings relevant to their evolving needs.”