It’s difficult to save when life’s circumstances tempt you to spend. But by joining a stokvel, you use your money in the way the group says you can, when the group says you can. That’s why every member benefits. By Warren Glam

Not long ago, Primrose Nomfesane, 46, visited her sister and marvelled at the amount of groceries she had been able to stock up on. ‘She had things like milk, rice and mielie meal. And even cleaning products. She had everything,’ remembers Primrose. ‘I asked my sister how she managed to get all of that and she told me she had joined a stokvel.’

Primrose, a mother of two, was very eager to have the same, so she used her sister as a connection to join the group. Today, their stokvel has about 40 members.

System structure

Primrose’s stokvel is specifically for groceries. In their system, the group collects R300, called a ‘sticker’, from each member at the start of January. This R12 000 is divided among half of the members, who have two months to pay it back. They also have to pay R30 interest per R100 they borrow.

Each member brings a ‘sticker’ for February and March, with those who borrowed in January also returning their loans plus interest (R780). This means that by March, there is roughly R39 600 in the kitty.

The half that missed out in January splits the R12 000 that comes in for April. The same loan terms apply to them. That is, stickers come in for May, then again for June. But in June, they must also pay back their loans along with the interest, taking the group’s balance to R79 200.

At the beginning of July, the group makes the first of two annual deposits at the grocery wholesaler. The sum is R15 000. After that, the group keeps on adding to the R64 200 left in the kitty by continuing the system they started in January. Half of them will borrow and have two months to pay it back, then the second group will do the same.

In December, the group makes its second and final deposit for the year at the wholesaler. It is also a sum of R15 000, leaving them with around R128 400 in the kitty.

A big truck delivers all the groceries at the end of the year, and every group member will receive the same goods in bulk – to be stored by the individuals for use as they see fit, says Primrose.

Each of them will get items such as mielie meal, 20 kg of rice, 20 kg of flour, beef stock and kitchen equipment. The cycle starts from scratch in the new year.

The ‘meat’

In addition to their ‘payout’ from the wholesaler, members will also split the R128 400 left in the kitty, netting each of them just more than R3 000. ‘We say money is for meat, but how you spend it is up to you,’ says Primrose. ‘You can pay your child’s school fees or buy a stove. “Meat” is just the name we have given this amount.’

By the book

While every member has a voice, only three people handle the books and track who has and hasn’t paid their money. Making this a three-person job allows the people responsible to cross-check each other’s figures.

Why join one?

‘It’s difficult for me to put R3 000 in the bank,’ says Primrose. ‘I’ll draw money every time I have a problem at home. But at the stokvel, it’s not easy because the money must go to the wholesaler, so I know I can’t spend it.’

What’s out there?
There are different stokvels to suit all needs. Here’s what’s on offer.

Rotational stokvels Each member brings a fixed amount of money to their regular meetings. One member gets to take the sum of the contributions home after each meeting, and they may use it in whatever way they wish.

Investment group These groups save money to make money. They either collect a lump sum from members or have members contribute every month. The group may invest the money to gain interest, or use it to start or buy into a business.

Savings stokvel In these groups, members contribute a fixed amount that is either paid out to them at a later date, or used by the group for a particular purpose or event.

Grocery stokvels These groups come together so they can save to buy groceries in bulk. Each member receives an equal share of the goods. These bulk purchases may happen annually, seasonally or even more regularly. However, Hope Mokoena of the National Stokvel Association of South Africa says groups tend to save towards a bulk purchase in December.

Burial stokvels Members form these so they may access funds when there is a death in their family. They contribute a fixed amount when they meet and they pay out a predetermined sum to a member who needs it.

Party stokvels Members save to organise street parties. The events are open to the public and the group will charge entrance fees as well as sell refreshments to help build their kitty. Members save profits, share them among the group or pay them to the hosting member if events rotate from house to house.