South Africans are increasingly opting for stokvels over formal financial institutions when it comes to savings and investments. As reported by CNBC Africa, a survey by Old Mutual found that 53% of informal saving schemes are stokvels. The South African stokvel economy has more than 11 million participants and is valued at ZAR49 billion.
In 2016, the majority of South African households belonging to stokvels had monthly incomes ranging between ZAR14 000 and ZAR19 999. This year, 42% of households with monthly incomes of ZAR40 000 and higher belong to more than one stokvel.
According to CNBC Africa, stokvels are about ‘the power of a collective. These individuals within the collective come together to pool money towards a common goal’. They use the stokvel as a vehicle to raise funds for short- to medium-term financial needs, including debt repayment, education and emergency savings.
Research shows that 60% of stokvels are investment focused, 18% are investment clubs and 22% are grocery stokvels.
