6 things to consider when joining a STOKVEL
This community-based savings system is not just for low-income households. Here’s what you need to know when joining a stokvel.
When it comes to joining a stokvel, what are the considerations you should keep top of mind? We’ve already touched on what a stokvel is but, traditionally, it’s been for community groups that may not have access to formal banking. They’re built on trust between like-minded individuals and friends.
1. MORE ARE JOINING A STOKVEL
Stokvels started and were sustained by older women in communities. However, as the cost-of-living crisis hits, more youngsters and millennials are embracing this uniquely South African method of saving. According to the National Stokvel Association of South Africa (NASASA) there are nearly 1 million active stokvels in South Africa currently. This equates to over 12 million members and an estimated R50 billion in savings annually.
TRENDING: Increase for SASSA grants come into effect 1 October 2023
As we’ve already explained, there are different types of stokvels. Savings, funeral funds, property investments, monthly groceries and annual pay-outs. By relying on the strength of your community and collective savings, joining a stokvel means an additional stream of income everyone can benefit from.
2. OWN CONSTITUTION
Each stokvel has its own constitution, and decisions are collectively made by its members. Like how the money will be collected, who is in charge of collecting it and where and when it will be invested.
3. EQUAL VOICE
Each stokvel member has an equal voice. Discussions around any concerns or grievances are open and transparent. Accountability when joining a stokvel is key, leading to a culture of open communication.
ALSO READ: 4 healthy FINANCIAL habits you should be practicing
4. BUILDING RELATIONSHIPS
There are many different stokvels but, depending on the size of yours, the gathering is most often an opportunity to build bonds and friendships within your community. You’re less likely to be fleeced by a friend.
5. CAUTIOUS APPROACH
If you believe joining a stokvel group is for you. Be sure to speak to community members you trust and do your research beforehand. Especially if it is a stokvel outside of your immediate circle or community.
The safest check is whether they’re registered with NASASA. Likewise, if you suspect fraudulent activity, you can report them on 010 007 2129 or email: info@nasasa.co.za.
6. CONSULT YOUR BANK
Keeping large sums of money at a stokvel member’s house can be temptation to local criminals. So, consider depositing the stokvel’s contributions into an existing bank account
ALSO READ: Ad agencies pressure their colleagues not to work for fossil fuel companies
Not only will this provide extra security, but there’s also the opportunity to earn higher interest rates on savings. Most major banks like ABSA, FNB, Nedbank and Standard Bank offer such savings schemes.
This article is for informational purposes only and should not be construed as financial advice. What do you think of joining a stokvel, do you have any experience?
Be sure to share your thoughts with our audience in the comments section below. And don’t forget to follow us @TheSANews on Twitter and The South African on Facebook for the latest updates.