STOKVELS

From the spirit of Ubuntu, Stokvels were born and we are grateful!!!

I belong to three Stokvels and I would not have it any other way.

The word Stokvel is a proudly South African term used to refer to group saving. Stokvels are traditionally a coming together of a group of people who agree to contribute a certain amount of money toward achieving a certain goal. Stokvels are built on the spirit on Ubuntu and the traditional lack of financial services to previously disadvantaged communities. An alternative bank by the community for the community.

Stokvels are an easy concept to grasp and understand, their objectives differ depending on the group of people that decide to club together with a common goal.

• Some save money monthly, as the capital being saved grows members can borrow from the amount at an agreed interest rate.
• When the year ends any outstanding amounts need to be paid back to the group and the pool, including interest, is split equally amongst the stokvel members.
• Other stokvels save money to buy things that are of a common interest to the group such as groceries, meat, or even alcohol ke Dezemba.

Types of Stokvels

Rotational Stokvels decide on a monthly rotation where all the members contribute an equal amount and the total collected is given to one member, each member has a month where the collection will be given to them throughout the year. To encourage socializing and as a token of respect and appreciation, usually when stokvels meet there is a celebration afterwards where food is shared amongst the attendees.

Some retailers offer discounts on bulk purchases, so saving as a stokvel allows the participants to make savings on purchases. These savings can be on any purchases, food or building materials. In investment stokvels members want their money to accumulate interest, buy assets or start businesses, whatever the members decide on.

Some people struggle with budgeting alone, they prefer to participate in groups as this allows them to stay disciplined to not disappoint the group - this pressure allows them to be consistent in their monthly savings. 

Most money, food, and alcohol stokvels choose to divide their savings in December as this month is notorious for celebratory money spending and as a time to rest whilst reconnecting as families whilst most people are on holiday from their jobs and school.

Younger generations have now somewhat modernized how stokvels form, the objective for their stokvels, how deposits are made and how the stokvel ledger is kept updated. We now have WhatsApp, building and Bank-backed Savings Stokvel where group accounts are opened, and deposits are electronic and more convenient. African Bank has some of the best bank-backed Savings Stokvels.

In recent years we have seen Property and Investment Stokvel Clubs being introduced via social media platforms such as WhatsApp and Facebook. In a Property Stokvel a group of people come together and save money to buy property or building material together.

• Once the property has been purchased by the group, the group rents out the property and the monthly income is split amongst the investors equally or according to how much each member has contributed to the purchase of the property (Shares).
• People commonly add the C to make the work Stockvel when shares are involved. The dividends on the shares are either reinvested or it is split in terms of the rules of the Stockvel.

What do I need to start a stokvel? Or if I want to join one, what do I look for?

This depends on the type of stokvel you want to start or join.

1. A constitution is essential, this will help to regulate your stokvel.
2. A clear outlining of the objectives/goals of this stokvel Is it a short-term or long-term stokvel?
3. Open a new group bank account in the name of the Stokvel. This is a type of account where each member should have access to the bank statements.

Note: A person who wants to join the stokvel should request all the above-mentioned information, do their research on the stokvel, ask the members, and make sure that the stokvel has members that are committed and believe in the objectives of the stokvel.

Something that is also critical, one word, three times - Trust, trust, and trust. From the inception of stokvels, trust has and will always be important. 

If you have doubts about a stokvel group, it is best to protect your own interest and do due diligence to rather save/invest alone until you find the Stokvel meant for you.

An app you can try out is StokFella. There are many types of Stokvels to choose from. Always do your research first.