Saving with a stokvel

Stokvels have been around since the early 19th century and come in many shapes and forms and are often looked at as alternative forms of micro financing. The general structure of a stokvel includes a minimum of 5 members who come together either weekly or monthly in order to collect and save funds as a group for a general purpose. The more modern equivalent is an investment group.

Forces you to save

Increases your returns

Provides access to large funds

Saving

This is a group account where by members contribute on a monthly basis and are paid out on a yearly basis, generally speaking. The amount paid out at the end of the period is usually specified at the beginning. As long as the member ensures to complete payments through out the year, he/she will be paid at the end of the year. Some saving stokvels are rotational while others save for certain events in the year.

Burial

Burial societies are formed by members of the community in order to give family members access to funds in the event of their death. Members meet and contribute monthly and their families receive a certain pre-determined amount if the member passes. Burial stokes are the most common as they provide the necessary help to people who do not have access to formal life insurance.

Grocery

This is a group account where by members contribute on a monthly basis and are paid out on a yearly basis, generally speaking. The amount paid out at the end of the period is usually specified at the beginning. As long as the member ensures to complete payments through out the year, he/she will be paid at the end of the year. Some saving stokvels are rotational while others save for certain events in the year.

Invest

Investment Stokvels give allow members to pool money together and minimise risks assosciated with investment. At the same time, they can increase returns and generate an income from these returns. Investment Stokvels generally operate by taking a once off lump sum followed by monthly contributions from each member. These Stokvels may invest the money on stock markets or in fixed savings accounts.

Lending

Borrowing Stokvels are formed in order to pool money together which then becomes available to members/sub-members of the stokvel to borrow. Fixed payments are required by members of the stokvels and anyone who borrows money from the stokvel is charged a high interest rate.

Business

Business Stokvels can also be known as Business Associations. These Stokvels generally consist of business owners operating in the same industry.. Similar to traditional Stokvels, members are required to make a fixed contribution to the stokvel throughout the year. Groups are formed in order to increase bargaining power which can be used to receive bigger discount on bulk purchases.

Party

Partying stokvels are formed by members who want to entertain their community at some point in the year. These groups will organise street parties that are open to the public, and would charge an entrance fee as well as sell food and drinks. Profits received from the parties would either be split amongst the members or given to one member based on a rotating system.

Mixed

A lot of people are members to numerous stokvels. However the benefits and structures of certain stokvels overlap. This leads to some stokvels being a combination of the above stokvels.