GEORGE NEWS - It is almost Christmas - a time when people want to have extra money available and many wish that they had saved up. Many, on the other hand, are glad that they had invested in a stokvel scheme. They will be sharing their stokvel savings and for some these savings bring a huge financial relief.
Stokvels, popularly known as Umgalelo, are made up of a number of people with a similar goal of saving and investing money or goods to be shared after a certain term.
Over the years many have taken the stokvel idea to include saving for a property, buying cars and business ventures. An internet search revealed that stokvels generate R44-bilion each year in South Africa.
According to the 2017 Old Mutual Savings and Investment Monitor, more than a quarter of black metropolitan working households prefer to save using a stokvel or savings club.
The Monitor further indicates that there was an 11% increase in stokvel membership among high-income earners (those earning R40 000 or more), from 46% in 2009 to 57% in 2017. This challenges the perception that stokvels are predominantly a lower-income phenomenon.
Thembalethu resident Monica Tukushe has been using stokvels for almost her entire adult life. She says stokvels have helped to transform her life and taught her to spend her money wisely and save for rainy days.
"Stokvels have helped me a lot in buying things I cannot afford. I managed to buy a house and build a house for my family. There's a lot I have gained throughout the years." She explains that stokvels teach individuals the discipline of saving, while contributing to growth in the community. "Unlike in banks, once you put your money in stokvels, you can't take it out just as you please. You must wait for the sharing period," said Tukushe.
Women from Lawaaikamp and Thembalethu who are members of Chithibunga, a stokvel where members contribute to funerals in their families. Photo: Zolani SinxoNtombi Tisani, head of marketing at Old Mutual Personal Finance, gives some tips to turn your stokvel into an investment engine.
Get the right advice
When it comes to money - your own or your stokvel's - it's important to get the right advice to ensure you're on track to achieve your goals. The financial knowledge and experience of your co-members may vary a lot, which could make it difficult to agree on the right savings strategy and select appropriate solutions. A qualified financial adviser can help you put a targeted plan in place that meets the needs of all the members of the stokvel.
Get out more
Stokvels are popular because members are obligated to contribute, but prioritising returns is as important as encouraging savings. Members need to get more out of their investments, otherwise they may as well be saving their money under a mattress with no opportunity for growth.
Empower members
Every stokvel member has the opportunity to play an active role in their club. Seek out a specific investment solution that offers value-added benefits that empower members through, for example, financial education. Apart from being simple, transparent, cost-efficient and flexible, financial solutions also need to add value for members.
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