SA stokvels saving billions, buying property despite rising cost of living

South Africa’s stokvels are proving resilient in the tough economic climate. Picture: Pexels

South Africa’s stokvels are proving resilient in the tough economic climate. Picture: Pexels

Published Oct 10, 2023


South African stokvel savers are showing their resilience and determination as they continue to stash away billions in savings despite the tough economic climate.

FNB has revealed that, since November 2019, its customers’ stokvel deposits have increased by 42 percent, surpassing the R8,3 billion mark in total member contributions.

Across the country, savings through stokvels are estimated to be valued at almost R50 billion a year.

The growth is a “potent indication” of the members' financial tenacity in the face of a challenging economic climate, says Lytania John son, chief executive of FNB's Personal Segment, adding that stokvels are still one of the most popular savings options among many entry-level to middle-income earners.

“While the make-up of stokvels continues to evolve, the principles of trust, community and mutual benefit remain the glue in the management and growth of stokvels.”

Andrew Lukhele, founder and chairperson of the National Stokvel Association of South Africa (NASASA) says it is “very important” to note that stokvels have, over the years, shown resilience in the midst of the barrage of laws prohibiting their existence.

“Stokvels have survived the deadly HIV/Aids pandemic; Covid-19 ravaged communities, but stokvels survived that too...The number of South Africans belonging to stokvels is estimated to exceed 11,5 million and the saving is valued at over R49 billion per annum.”

While there is no evidence that points to the demise of the stokvel movement as a result of Covid-19 pandemic, he says there is evidence pointing to the emergence of new types of stokvels, especially the property stokvels. There is no quantitative research in this area but young generations of members of stokvels have embraced the property stokvel market very well.

“They seem to understand the payment ratio associated with property investment as opposed to the older generation of stokvel members. The latter is used to short-term financial gains.”

Some property stokvels are for the purposes of owning shares in investment property while others are created so that property shares can be left to members’ children, thereby creating generational wealth.

Sifiso Nkosi, product growth head at FNB Retail Cash Investments, says the surge in stokvel savings comes against the backdrop of a high interest rate environment, highlighting the importance of financial discipline among those who use this savings method to accumulate money for their goals.

“It’s also important to acknowledge that stokvels have a profound significance beyond promoting a savings culture, as they facilitate economic participation for individuals and families. In addition, people who save through stokvels generally have very clear savings goals, whether it is to save for home-related expenses, large purchases, or even school fees.”

As we approach the festive season period however, he urges stokvel members to avoid exhausting their savings in order to generate even better returns in the future.

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