The Social Capital of Stokvels

Published 5 years ago

A traditional, informal means of saving, stokvel investment societies continue to bind communities in South Africa and is a multi-billion dollar industry. Their capital is trust, and their currency a central fund that spawns new opportunities.

In this house in Centurion in Johannesburg on a winter afternoon, there’s song, food, camaraderie and joy. And one common component that binds the women: stokvels.


For most South Africans honoring the traditional mode, this is the word synonymous with savings schemes that they have come to trust over generations.

And like this meet we are witness to today, it stands for a union in which a group of people who know and trust each other enter into an agreement to contribute a fixed amount of money towards a common pool.

The group of people we are meeting are the Akanani Sisters, stokvel members who occasionally come together, bantering over a hot meal and listening to music.

“The whole purpose of the stokvel is so that we may come together as ladies and mothers made of different age groups, so we may build and advise one another on life matters. It is not just about collecting money, we cry and laugh together,” says Bahedile Mooke, one of the members.


Stokvels, the traditional South African savings scheme with 11.5 million members in 810,000 groups contributing R50 billion ($3.76 billion) annually to the economy, is often overlooked.

“If you speak of something that is outside of that framework, then that is something else,” says Mizi Mtshali, the Chief Executive Officer of the National Stokvel Association of South Africa (NASASA).

The Akanani Sisters stokvel was formed in 2015 by three family members who gathered on a monthly basis. The group, however, is not registered with NASASA and does not save their money through financial institutions. However, they are looking at registering with NASASA as a precautionary step.


“We got tired of meeting only when there were funerals, so we decided to start a small stokvel even if it was just for groceries,” says Sibongile Motsoeneng, treasurer of the Akanani Sisters.

This afternoon, they are six professionals from Johannesburg who are close friends.

“Society forces you to always put money aside – I don’t play around when money has to be paid, because we all want to be happy at the same time,” says Motsoeneng.

The monthly premium for the stokvel is R1,300 ($98) for which R500 ($37.6) is set aside towards groceries and rest distributed among the members at the end of each year.


“Our groceries are not like other stokvels, where you see them buy maize meal in large quantities. We buy groceries as per our personalized everyday needs. So the grocery would last us for about six months and one would just add on meat and other small things on a monthly basis,” says Motsoeneng.

In addition to their stokvel, they contribute a R300 ($22.5) towards each other’s birthdays for buying presents, and R2,000 ($151) for their occasional weekend holiday trips.

Nonzolo Soldati, the chairperson of the stokvel, says they drew up a constitution which dictates the size of the contributions, when the accumulated money is to be paid out, and the roles and responsibilities of the members that have to be abided by.

“If you fail to pay your monthly premiums for more than three months, that would mean you forfeit your portion of your groceries and savings at the end of the year. Also, if you fail to attend the monthly gatherings, you are fined R50 ($3.76),” says Soldati.


“We used to deposit the money in the bank, but now we no longer do so because of the exorbitant bank charges,” says Soldati.

Through these stokvels, the members’ lives have changed, as they are not unduly stressed by financial woes come January. Their finances are in order and they also don’t feel the pinch of food price hikes through the year.

Apart from the groceries they purchased last year, they each saved R17,000 ($1,280), which is nothing unusual, according to Mtshali.

“On average in South Africa, a stokvel consists of 20 participants and they can save [as much] R50,000 ($3,765),” says Mtshali.


Investing in stokvels is not without risk however. Unlike the formal financial institutions, the only security members can bank on is trust. As a result of its unregulated nature, fraud in stokvels is common.

Ask one of the Akanani Sisters members, Bongiwe Mncube, who lost all her money. She was scammed in a burial society in Kempton Park.

“We lost two people [to death] in our community in the space of two months. That is when we realized that all the money we were ‘putting away’ was not there,” says Mncube.

They were able to pay for the burial of the first bereavement, but when it came to the second, they were scraping for funds.

“We last knew that we had money, but when we went to check the bank statement, we were surprised to find out that money was not being deposited for a couple of months. So I walked away because I had no leg to stand on,” says Mncube.

Mtshali says such stories are the reason why stokvel associations must register with NASASA so they can check the legitimacy of such societies. So, should the unthinkable happen one day, the participant is able to press criminal charges.

The word stokvels is believed to have originated from the term ‘stock fair’ used to describe auctions run by English settlers in the 19th century, but as the industry is becoming the leading form of savings and investment in South Africa, it is referred to in multiple ways, such as social clubs, gooi-goois, investment clubs, kuholisana, and makgotlas. The stokvels available vary according to the needs of the members.

“As much as there are holiday stokvels and property, social and party clubs, but grocery, burial society and saving clubs are still the most dominant,” says Mtshali.

Ponzi schemes and pyramid schemes have also camouflaged as stokvels.

“What has happened over the years is that a lot of operators have started abusing the word stokvels…They use that word to attract customers for whatever product they are looking to sell,” says Mtshali.

While stokvels may seem like an informal way of making money, it is serious business. Members do their homework, deliberate about which companies to invest in and make investment decisions. And the best part about it is knowing there may be a financial windfall one day. It’s cash that is built on trust and binds communities.

Stokvel Homes?

Nicolas Manyike

Nicolas Manyike’s property stokvel leads to new investment opportunities.

Land ownership is a burning topic in South Africa, which is why publicist and businessman Nicolas Manyike founded Property Stokvel Investment, a stokvel that aims to buy and rent out properties, encouraging black people to be property owners.

Manyike, who grew up poor in the Mpumalanga province of South Africa, watched his mother struggle with accommodation, yet she was a member of various grocery stokvels.

“My mother was in a lot of grocery stokvels and we would eat up all the food, then the struggle would continue. So I always thought ‘how about we use the same concept but for something that has long-term benefits for us as a black community’,” says Manyike.

He decided to rework the stokvel model to have long-term benefits.

“We need to shift our mind-set around stokvels,” he says.

He worked on his idea, through drafting the constitution and coming up with the two phases that will create the members enough capital to be able to purchase land.

“The first phase is to get 100 members that would contribute R2,100 ($158). The R100 (7.52) is for administration purposes. So that we could accumulate R1 million ($75,300) in 10 months that we will use to purchase property, or a franchise that will create profit for the members,” says Manyike.

It is only in the second phase that individual property will be bought for each member.

Manyiko says that ownership of the house will be registered in the stokvel’s name until all participants are house-holders within two years.

Property Stokvel Investment currently has over 80 members and is not registered with NASASA. Manyike believes stokvels do not need to be registered as they are self-regulating.

“All stokvels in South Africa are self-regulated. NASASA is more focused on grocery stokvels. We are bound by our constitution,” he says.

“We are banking with Nedbank as a club account and we have a committee, once we have a 100 members we will increase the number of people in the committee,” says Manyike.

Purchasing property in South Africa is a struggle due to increasing home loans and interest. Could stokvels be the future of acquiring property?

Download A Stokvel

Tshepo Moloi

Tshepho Moloi says he has championed the future of stokvels.

Imagine being a stokvel member and never having to meet? Well, that is what the future of stokvels looks like based on an app designed by Tshepho Moloi, the founder of StokFella.

“Most businesses are bought out of frustration of people saying that we could do better. I wanted to start an investment stokvel but the administration behind it was a bit of a headache,” says Moloi.

Moloi went home to Soweto, where he grew up, and observed a burial stokvel that was in existence for two years and had developed into an investment and grocery stokvel.

“I found out that the common problem is maladministration… So that is how the birth of StokFella came about,” he says.

StokFella, is a smartphone-based app that seeks to help stokvels organize, manage, communicate and be more efficient in growing their wealth.

“By doing that, it gives them access to economic opportunities. So they grow from point A to point B,” Moloi says.

In just two years, the app has 5,000 active members and is user-friendly for all age groups and LSMs.

“When stokvels want to be endorsed by us, they need to come to our offices so that we may conduct due diligence on them. However, those that just want to use the app could just download it,” says Moloi.

The main challenge StokFella faced during its initial stages was with the paperwork of regulatory laws and reaching the right market.

“But I am happy to have championed the future of stokvels. Honestly, it is not a unique solution but our implementation is how we have been able to get far,” he says.

“If 10 years from now, we still have a R49 billion ($3.69 billion) industry, then we have not done our job!” says Moloi.