Solo saving can be a grind. Stokvels channel the spirit of ubuntu into the sometimes longwinded process of putting money away for a rainy day. And they can help you save up for those big-ticket items, be they new appliances or upgrades on your home. 

If you want to be nasty, you might be tempted to label stokvels as a kind of pyramid scheme – and there have been plenty of dodgy scams pretending to be stokvels, so it pays to be on your toes. But pyramid schemes are very different from genuine stokvels, with the latter being specifically built on collective trust and honesty, driven by camaraderie and community, and powered by ubuntu.  

How it works 

A stokvel is, in essence, a not-for-profit financial institution (like a cooperative) that’s entirely owned by its members. In other words, it’s like a bank that’s entirely owned by the people who make use of it. Stokvels enable ordinary people to save collectively and, in so doing, to save up more than they might be able to save on their own. 

These savings clubs represent a massive portion of the economy. According to the National Stokvel Association of South Africa, we have over 800 000 stokvel groups in this country, representing some 11.6 million individuals whose collective annual savings amounts to almost R50 billion. 

Stokvel members meet on a regular basis and contribute a fixed amount of money into the scheme each time. Typically, on a rotational basis, each member gets an opportunity to dip into that growing pot of money, the benefit being that when it’s your turn for a payout, you get a larger lump sum. In this way, you now have access to an amount that might be substantial enough to take care of major purchases. That could mean finally being able to afford that much-needed appliance or pay for those renovations you’ve waited so long to implement. Some stokvels are specifically for financing emergency big-ticket outlays such as funerals. 

While stokvels operate under a written constitution, they rely on trust, honesty and a level of cohesion and shared responsibility between members; they’re designed to provide social security as much as financial rewards. Members often provide social support for one another and, at meetings, might discuss ideas, listen to financial predicaments or hear about savings and investment opportunities. 

Making it official  

Several South African banks offer stokvel-specific accounts that cater to the uniquenesses of a group-savings dynamic. Some of these accounts are also incentivised, offering added benefits to stokvel members. 

Nedbank’s Stokvel Account, for example, is a group savings account that gives members access to discounted grocery and school supply purchases at partner stores, as well as R10 000 burial cover for each member (for a contribution of R25 per member per month). Beyond these perks, there are also no monthly maintenance fees on these pay-as-you-use savings accounts, plus members get bank cards and are able to deposit their regular stokvel contributions and make withdrawals instantly. 

FNB’s stokvel account also rewards members with discounted funeral cover premiums, and offers a host of online and SMS banking facilities designed to cut down on the use of physical cash. While members can make deposits via electronic transfer, F NB also allows stokvel members to make free cardless cash deposits at ATMs, and has added measures to enhance security around the authorisation of payouts to group members. 

Standard Bank enables stokvels to open what it calls a ‘Society Scheme’ savings account, which promises a higher-than-usual interest rate on the group’s savings. 

As with other banks, a major benefit of using a bank account is to reduce the risks associated with having to handle large quantities of cash at meetings or simply keeping it in a member’s home. 

While such banking opportunities are empowering for stokvels in that they increase security, they can have the knock-on consequence of reducing the group’s social dynamic by taking away the need for members to gather as a community. For many, this may be a drawback. Leaning too much into the traditional western banking format might ultimately rob stokvels of the thing that makes them so special: getting people together to share their resources. 

Banking for the people 

Essentially a form of community banking, stokvels’ more formal name is ‘rotating savings and credit associations’ – and while they’re called stokvels in South Africa, they aren’t unique to our country. They’re called chama in East Africa, ayuuto in Somalia, gam’eya in the Middle East, cundinas in Mexico, tanomoshiko in Japan and pandeiros in Brazil. 

There are also a wide variety of stokvel types: 

• Rotational stokvels: every week, fortnight or month, each member contributes a set amount towards a common pool, and then each member gets a lump sum on a rotational basis. 
• Grocery stokvels: specifically for saving up towards a major end-of-year bulk grocery shopping spree. 

• Savings clubs: for storing up money that can be accessed at the end of a predetermined savings cycle, often at year end. 
• Investment clubs: focus on enlarging their pooled funds by purchasing stocks, investing in a business or generating interest via a bank account. 
• High-budget stokvels: used mostly by men who like to spend big – and do. 

Words by: Keith Bain
Photographs: Getty Images