Leading South African bank to introduce stokvels by 2025

There’s great news for supporters of community savings, as a major South African bank will begin offering stokvels starting next year (2025). For those who are unfamiliar about the concept, a stokvel is essentially a credit union in which a group of people contribute a fixed amount of money to a common pool, says the National Stokvel Association of South African (NASASA).

It is a uniquely South African form of saving that’s born out of close-knit communities – often townships or informal settlements. And based on their popularity in Mzansi, it is no surprise that a major South African bank will offer stokvels from 2025 onwards. This was revealed by Capitec CEO Gerrie Fourie during an interview with Biznews founder Alec Hogg, reports Daily Investor.

SOUTH AFRICAN BANK WILL OFFER STOKVELS

As The South African has reported before, stokvels are a good way to invest and save without spending a lot of money. Any and all contributions are pooled together and distributed equally among all contributors/investors according to a prearranged schedule. For the elderly or those people living close to the poverty line, often surviving off South African Social Security Agency grants, a community stokvel is one of the best financial aids at their disposal.

The most common stokvel is for savings, where monies are strategically invested. Beneficiaries receive a lump sum on a rotational basis – either in cash or through deposits into a bank account. There are also property stokvels to make owning land/property more accessible for those who wouldn’t ordinarily be able to afford it. Similarly, funeral cover stokvels include the purchase of the coffin, funeral arrangements and financial support to the family. There are even weekly grocery stokvels. For anything that costs money, a South African bank will offer stokvels for it.

WHO DO YOU TRUST WITH YOUR MONEY?

Unfortunately, due to their shady and informal nature, many residents are weary of just handing over all their money to an unverified entity. Even NASASA warns that some stokvels can behave in an unreliable, unsecure and fraudulent manner. That’s where a major, trusted South African bank can step in and make a difference. Capitec is by no means the first bank to entertain the idea. Standard Bank, FNB, and Nedbank (to name but few) have already tested the waters.

The real benefit for the underprivileged is that weekly, fortnightly or monthly contributions can be as small as R100. And you will still benefit from guaranteed profitability and be covered by insurance. Currently, Capitec has increased its number of clients – a lot of them middle to low income – to 23.2 million. After producing strong results for the first half of this financial year, their earnings have surged to 36%. As a result, offering community-based savings and investment products is the next logical next step, says the bank’s CEO.

ROOM FOR GROWTH

Fourie believes there’s a big, unexplored opportunity with stokvels, otherwise known as a rotating savings and credit association (ROSCA). Any stokvel proprietor is required to be a member of NASASA, which currently presides over 800 000 groups and collects roughly R50 billion every year. If you like the idea, simply find out if your current bank or financial services provider offers such a service.