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The Social Capital of Stokvels



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.



A Statement On The Skyline



South Africa is on its way to another record with Africa’s tallest building.

A new superstructure is making its mark in Sandton in the heart of Africa’s richest square mile.

The $3 billion project is expected to be completed by the end of 2019 and beat Carlton Centre’s reign as the tallest building in Africa since 1973.

The 223-meter, 50-storey Carlton Centre in Johannesburg has for 46 years stood the test of time as a skyscraper dominating the skyline in South Africa and the continent.

The new building coming up in Sandton will be a 55-storey, 234-meter classical Italian eponym paying homage to Leonardo da Vinci, the Italian artist of the Renaissance era.

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It adds to the luxurious portfolio of hotels by the Legacy Living property group.

As The Leonardo rising from the bedrock and gradually etches its presence on the skyline, Gijs Foden, Director of Retail Management in Legacy Living, says it is a beacon that represents economic growth far beyond the surface.

“From a development perspective, everyone knows about the crisis in construction. There is light at the end of the tunnel, through a tough economy. It is a tough market and we are working our way out of it. We are going up. We are part of the beacon of hope through tough times,” he says.

South Africa has nine out of 20 of the continent’s tallest buildings, amounting to 1,277 meters in total and 5,000 steps up a staircase.

While most of these buildings were erected in the 1900s and early 2000s, records have stayed the same.

Johannesburg’s Ponte City Tower standing as the third tallest building in Africa, coming in after Kenya’s Britam Tower at 200 meters.

The Leonardo was initially set out to be a mixed-use building with 33 floors but has since escalated to dominating the South African skyscraper inventory.

Foden says the development will not only provide investment opportunities for South Africa, but it will celebrate African authenticity.

Set to be completed in the year of Leonardo Da Vinci’s 500th death anniversary, African art will be the center-piece of the tower.

You look out of the window and that is your canvas. Internally, the art in the building is African art.

“We are supporting the African artist, it is what it is. The art defines the building. Keeping the essence of the building and at the same time the warmth and lifestyle will be an attraction, irrespective of the Italian name,” Foden says.

By following due processes in getting the height approved, overtaking Carlton Centre’s record, Foden says: “It [Carlton Centre] is still an icon and no one has been able to beat it. It is different times and it is also different generations. This is our generation which is going to be a timeless building for many years to come. It is an urban flight.”

However, the record by The Leonardo may be short-lived as yet another African skyscraper may overshadow it by the end of 2021.

 The Pinnacle, currently being built in Nairobi’s financial hub, is set to be a 70-storey mixed-use development.

According to a yearly study published by The Council on Tall Buildings and Urban Habitat (CTBUH), Beijing’s China Zun 528-meter skyscraper was the tallest building completed in 2018, making it the eighth-tallest building in the world.

 The study reports that 16 new buildings entered the 100 tallest lists in 2018; up from 14 in 2017, 76% of these were in Asia.

Co-Arc Director, Francois Pienaar, says the influx of skyscrapers in Africa is a way for property investors and developers to exploit the options of sites.

“Sites can become very valuable. There are a lot of things to do with money – [for] better returns for the investment of the land, and that is why people go up. It takes quite a lot of courage, to go 55 floors.

You need to have a client who is inspired to do it. Especially, with the volatility of Africa,” Pienaar says. 

Despite the competition for a piece of the sky, none of the 2019 projected top 30 tallest buildings will supersede the world’s tallest building in Dubai at a towering 829.8 meters with 163 floors above the ground.

The Burj Khalifa has boasted this record since its completion in 2010.

According to Pienaar, the opportunity to build a structure of this magnitude does not come by every day in Africa.

Breaking his 30-storey skyscraping record, Pienaar, who is currently working on The Leonardo, adds:  “It takes a lot more when it comes to delivering services and the kinds of aesthetics that take place.

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“The building has a skin outside which is imported from Spain. It is a new invention from Spain that reduces the heat load on the glass. We have produced a building that is responsible for the climate. We are trying to keep the building energy-efficient,” he says.

As the global economic outlook develops, there is fierce competition for a piece of the sky.

The taller the building, the more money it pulls in.

As the South African economy picks itself up, the lingering shadow of the Leonardo will represent a symbol of growth and a new dawn.

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Lab-grown Diamonds: Never Mined, It’s Man-Made



Turns out there is literally no difference between lab-grown diamonds and natural diamonds, well, apart from the price.

Ever wondered what the difference between lab-produced diamonds and natural diamonds was? Well, nothing. They are exactly the same.

As with most things of value, a great deal of information has been produced over the years about the price of diamonds. In short, many believe the real price of diamonds is far lower than what ‘big business’ would have us believe and that it is driven up by our insatiable hunger and the social importance we place on the stones.

In line with this, there is a widely-held belief that they are not rare and the market is being deliberately controlled to create the façade that they are difficult to produce. Therefore, their price is dictated by the fact that they symbolize the most enduring of all human emotions – love.

 With that out of the way, in recent times, society has developed a pragmatic relationship with diamonds, rather than a romantic one that has long sustained the industry.

It might be that we live in the era of instant gratification or that we have stopped romanticising the idea of waiting millions of years for the precious stone, but more people have embraced the idea of purchasing lab-grown diamonds.

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Unlike an imitation gem like cubic zirconia, it has the same physical characteristics and chemical components as a natural diamond but production time is much shorter, enabling producers to create it in a matter of weeks.

Lab-grown diamonds producer Ross Reid offers FORBES AFRICA a very sobering perspective with the following analogy to describe man-made diamonds.

“If a couple can’t fall pregnant using conventional methods, they do IVF where the baby’s origin of life is manmade. Is that not a real baby when it’s born?”

The room falls silent as all contemplate this question.

“So by that logic, it is a real diamond,” Reid states emphatically.

Reid is the Co-Founder and Managing Director of Inception Diamonds, One of South Africa’s first Diamond companies to offer lab-grown diamonds and fine jewelry.

The world’s leading diamond producer, De Beers, however, has a different perspective.

“We view natural diamonds and lab-grown diamonds as very different products as they have completely different production processes. Natural diamonds are created in the earth, under intense heat and pressure over billions of years. Each diamond is rare, finite and unique,” says Bianca Ruakere, a De Beers Group spokesperson.

De Beers Lightbox range. Picture: De Beers

Reid says he recognizes the market potential for global growth in being able to offer conflict-free, environmentally-friendly lab-grown diamonds, especially to the millennial market.

“With the creation of laboratory-grown diamonds, it allows you to offer the consumer the same thing optically, physically, and chemically at a big discount. So you can have the same beauty, the same hardness, the same look and the same feel for less money,” Reid says.

Large diamond producers have also recognized the same potential.

De Beers Group has been producing synthetic diamonds for industrial purposes for more than 50 years. “Last year, we launched Lightbox in the United States to market a range of fun, fashion jewelry using lab-grown diamonds. They are accessibly priced, and a distinct product offering compared with natural diamonds,” Ruakere says.

 Price is not the only reason that encourages the market to opt for lab-grown diamonds. They are also other ethical factors such as having a guarantee that the rock on your finger is conflict-free.

 Shogan Naidoo, who proposed to his fiancé, Preba Iyavoo, on Valentine’s Day at the popular independent cinema house, The Bioscope, did so with a healthy bank balance and clean conscience.

They were traditionally engaged in July last year, so by the time the ring engagement happened, Iyavoo was caught completely off-guard and was pleasantly surprised.

“Shogan is the most endearing person, but he’s not romantic in the slightest,” says a giddy Iyavoo, who recalls the proposal that happened in a filled theater, with a movie Naidoo had created just for her.

The couple are besotted with their lab-grown diamond. Naidoo says after doing exhaustive research to find the perfect ring to propose with, all conventional options had failed him.

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 He says his final ring choice far exceeded his expectations in price and design. Naidoo explains that Iyavoo has a very specific preference and that he was not willing to compromise in getting her the perfect ring but the one he initially wanted was in the range of R80,000 ($5,500).

  “We were planning a wedding and we’d just bought a house,” he says. The exorbitant cost of retail rings led him to search out of the box, and eventually the box returned with the perfect gem.

 The couple who lead a very environmentally-conscious lifestyle, say they are especially proud to be the custodians of this ring because they are guaranteed it’s conflict-free and no miners were exploited.

 Reid says he has to grapple with a great deal of scepticism because many are not ready to fully embrace the idea of lab-grown diamonds despite their advantages.

“The Federal Trade Commission has changed the definition of a diamond. It does not need to come from the ground.

“We have opened up the market for people to be able to afford beautiful pieces without compromising on quality,” Reid says.

Change is inevitable and with that, there will always be those resistant to it. But one thing is for sure, society’s relationship with diamonds are changing.

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A New Language Doesn’t Hamper Kids Learning. Other Things Do




South Africa is a linguistically and culturally diverse country. There are 11 official languages and several other minority languages. But English continues to be preferred as the language of learning and teaching.

Many South African children are still in the process of learning English by the time they first start going to school. In a single English-medium classroom, one can find children with various levels of English proficiency; from children with English as their mother tongue to children who have never learnt English before.

This situation poses a range of challenges for both the teacher and the children. One of the biggest challenges is that a certain level of proficiency in English is required for the children to be able to perform well academically in an English-medium school. It’s a widely known factthat academic success is very much dependent on language competence and proficiency.

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This means that there’s a great need to understand how language develops in children’s early school careers. It is also important to understand the cognitive mechanisms that underlie language learning. To further explore how this happens in the early years of schooling I did a study involving pre-primary children in an English-medium school in Cape Town.

The group consisted of children who were still learning English as well as children whose mother tongue was English. The children were very diverse – there was a total of nine different home languages in the group of children who were still learning English.

The findings showed that the ability of children to develop their language skills didn’t depend on whether they were proficient when they started out. Their ability to learn and advance – or not – was in fact dependent on a range of other factors, none of which had to do with English language proficiency.

The findings

The research aimed to understand the link between language and working memory development. I did this by tracking how working memory developed for the children chosen to take part in the study.

Working memory is the ability to store and use information in the short-term and is important for our everyday lives. For example, we use working memory when we need to remember an address that we just heard while we are looking for a pen to write it down. Working memory also underlies many important academic competencies, like reading and mathematics.

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The children were broken into two groups: those with English as their primary language, and those still learning English. They were given the same tasks; these were an English language assessment and working memory tasks. They were assessed three times over the course of the year – at the beginning, middle and end.

The results showed that both groups improved over the year on the assessment of English language abilities. The results also revealed that great improvements were made in language development during the first year of formal schooling.

Results from the working memory tasks indicated that children who were still learning English, as well as the children who have English as their mother tongue, performed the same on these tasks and achieved comparable scores. Children in both groups saw their language abilities and working memory abilities improve over the year.

The most interesting finding is that the route, or trajectory, the children’s cognitive and language development followed was the same for both groups, regardless of the English abilities they had at the beginning.

Importantly, the result that working memory scores between groups were comparable also indicated that the amount of knowledge of English that a child had didn’t affect their working memory abilities.

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What this points to is that, if a child’s working memory scores are low and the trajectory of the development is not the same as their peers, there may be cause for concern. In this case, the children should be referred to an occupational or speech therapist for further assessment. Our research shows the fact that they’re struggling can’t simply be explained away as a “symptom” of the child not knowing English well enough.

Falling through the cracks

Studies like these are important for giving professionals better ways of seeing if a child has a disorder or is only struggling because they have not acquired a sufficient level of English yet.

In the context of a classroom with various languages and proficiencies of English, it is easy for a child with a disorder to be overlooked.

Along with the under-resourced schools and over-burdened teachers, heterogeneity among learners results in them not receiving the support that they need, be it academic or linguistic. Those whose primary language is English as well as those learning English suffer alike. The upshot is clearly seen in the worsening educational crisis in South Africa.

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