Ever heard of a stokvel? It might be called something else where you are from, but in South Africa, a stokvel is roughly defined as an informal savings or investment society – and, according to Tshepo Moloi, it is a R44bn (US$3.2bn) market.
According to How We Made It In Africa, Moloi the founder of StokFella, a mobile app that helps stokvels manage savings, payment schedules and group activities. Having been a part of various stokvels before, Moloi saw a challenge in the administration of them and developed the app to streamline the process.
The first iteration of the app focuses solely on simplifying the running of stokvels. However, in the near future, he wishes to integrate into the banking sector and expand across the continent.
There are different types of stokvels that serve particular purposes. For example, contribution stokvels are where each member regularly contributes – every week, fortnight or month – a fixed amount to a central fund. Members would then take turns, be it monthly, to receive the lump sum and are free to spend it as they choose.
Other examples include burial societies, where money is saved for funerals; and borrowing stokvels, which loans money to its members at a high-interest rate from the central fund.
Most people use stokvels because it allows for savings, insurance and investment benefits while remaining completely informal – they don’t have to be registered.
Moloi says it’s the cultural aspects of stokvels that have kept these societies alive and well since the 19th century. “It is a culture amongst people who believe in one another, who believe by putting a common goal together they will be able to uplift one another. Be that upliftment through finance, upliftment through going on holiday, or upliftment through sharing knowledge,” he explains. “Stokvels come together, enjoy a meal, have a beer or two, converse… just catch up. That is where the whole culture and the whole accountability aspects come into play.”
Read full story at How We Made It In Africa