Stokvel is a group of people who come together for specific reasons among them saving money as a collective for an agreed purpose that could be burial reason or buying groceries among others.
(WATCH VIDEO: SA has approximately 8000 Stokvels worth of R44 Billion)
This Stokvel sector is regarded as a major form of investments for many South Africans.
Busi Skenjana, managing director for the Brand Support Keys says there is need for the financial services sector to capacitate the industry as to ensure its profitability for members.
“There is need to inform Stokvels about available options like investment packages as some utilise savings accounts that are not interest yielding,” she said.
She lamented the failure in the sector to make strategic interventions in the sector.
“There are no products in the market targeting Stokvels and this is making the capital markets to lose out on available capital.”
Skenjana noted that the sector has an embedded culture of mandatory payment that is based on trust as there is no legal document binding members.
(WATCH VIDEO: Contrarian View: Stokvels help South Africans save money)
On possible working relationship with banks, Skenjana said, Stokvels are still generally sceptical about the financial institutions due to bureaucracy and interest charges.
“There are different forms of keeping the money which are used by Stokvels with banks being one of the most used though some still keep the money in their houses.”
Skenjana said Stokvels are dominated by women partly due to historical and traditional family setups.
“Traditionally women are supposed to be resourceful and this makes them to be innovative stretching a one rand to ten rand. This augurs well with Stokvels as they give knowledge on how one can maximise on the little they have.”
“Women's involvement into stokvels can also be traced from the country’s historical point as males were predominantly working in mines with women tendering their homes in rural areas. Women would find ways of creatively building on the remittances from their husbands,” Skenjana added.