Stokvels are group saving schemes that involve a number or people agreeing to meet regularly and to make financial contributions to be saved or used for an agreed objective.
The social element is quite important for stokvels too, as members meet regularly and socialise. According to statistics, nearly 11.5 million South Africans belong to stokvels in South Africa.
The National Stokvel Association of South Africa (NASASA) there are four main types of stokvels:
- Basic Revolving Savings Schemes
- Loan Schemes
- Home Loan Schemes
- Shared Buying Schemes
Statistics show that men are more likely to belong to stokvels focused on investment and burial. Members are also most likely to fall within the age group of 25 and 49.
Money is generally deposited into the stokvel’s bank account.
These types of stokvels offer members a simple and convenient way of saving money. The money can be used by members however they choose; there are no limits.
Some stokvels have money-saving schemes specifically for burials. Funeral costs can often run into tens of thousands, so many people often choose to save well in advance. Some stokvels have saving schemes that are created to save as much as possible for members’ funeral needs.
With these types of stokvels, members generally contribute funds over 11 to 12 months. At the end of this period, members distribute amounts to specific members. The members then use this money to buy groceries during the holiday period or at the beginning of the year.
Members contribute a set amount that is given to a group member in their birthday month.
Members contribute money and use it to invest.
Joining different types of stokvels can offer a simple and convenient way to save money and may also encourage saving and investment behaviour.