There are about 810,000 active stokvel groups in SA, which consist of more than 11-million members, according to the National Stokvel Association of South Africa (Nasasa).
These stokvels invest an estimated R50bn annually, Nasasa says.
Spokesperson of personal finance website JustMoney, Athenkosi Sawutana, says most stokvels are managed by people with skills “at stretching limited funds”.
However, she says, there are ways in which stokvels can ensure better governance and improved financial returns and gives these tips:
Establish good governance
Reach consensus on your group’s goals. Appoint a chairperson and treasurer and take minutes at gatherings. A constitution, or written set of rules, will help you to remain focused on your goals and provide reference points should problems arise.
Safeguard your funds
Some stokvel members are wary of banks and formal institutions. They retain savings in cash, making them vulnerable to theft or household fires. Shop around for a suitable bank account with a reputable institution and check your statements regularly.
Maximise account benefits
Financial institutions compete for unbanked stokvel money. Many offer accounts specifically for stokvels, such as group savings accounts with member benefits that include discounts on school supplies and groceries, and burial cover for members. Compare offerings before investing your savings.
Negotiate bank fees
The more funds you have, the more you can negotiate for the lowest possible fees, or even no fees.
Take advantage of special offers
Many retailers offer special benefits for stokvels. These may include free grocery delivery within a certain radius if sufficient money is spent monthly. Also look out for stokvel events with exclusive discounts, a shopper to assist the stokvel buyer, and assistance with dividing up groceries.
Move from saving to investing
Many stokvels are set up to meet members’ basic needs, but consider building up sufficient savings to beat inflation. Ask your bank or another reputable institution for advice before committing your hard-earned money. A unit trust, for example, allows the withdrawal of funds at any time, as there are no set investment periods.
Learn from your network
Joining a stokvel is an informal way to learn about generating money and making your funds stretch further. Improve your financial literacy and share your own knowledge with other members.
Seek professional advice
Consider speaking to a professional financial adviser before your group makes any major investment decisions. Con artists abound, and stokvels are among their targets. Only deal with well-known institutions that have established track records.
– JustMoney
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