Mother had a slow cooker that used to produce the most delectable miracles from which concentrated aromas akin to magic would escape. That slow cooker was a treat because she only brought it out to play on special occasions. She received it as a result of a stokvel she was a part of way back.
Stokvels were created as an avenue to facilitate black people controlling and having access to their own funds. Having been excluded from the formal banking sector in the past, this group sought a way to protect themselves and help their families cope with certain hardships. Their popularity has mushroomed: according to the National Stokvels Association of South Africa (NASASA) there are over 800 000 groups, consisting of a collective of just under 11.5 million members. Together they are said to contribute up to R50 billion annually. And they are not undertaken solely by the poor.
The basics of a stokvel are that each member of the group, which could consist of the women’s club at church, the locals in the community, colleagues or friends, is required to contribute an agreed upon amount, say R500, each month. Each month, a member (or members) has a turn to receive the month’s tally, or a share of it.
There are variations on the theme. Sometimes the member recieves an item bought with the money (like the slow cooker – or, in the case of a helper we used to have, the furnishing of her home). Sometimes (in what’s called a Contribution Stokvel) she receives cash. There’s another version Mother partook in, which proved most lucrative, and that was termed a Borrowing Stokvel: the money is put into a bank account and lent out at a significant interest rate so that when the loan is deposited back into the account it comes with a little bit extra. Burial Stokvels help a family pull off a send off for a loved one, funding the slaughtering of livestock, as well as plenty of groceries, to feed the masses coming to show their respects. And another stokvel my mother was once part of dabbled with the idea of raising enough money to buy and renovate an old building so that it could function as a residence for university students.
The apparent simplicity of stokvels is deceptive, as all manner of other dynamics come into play. There are members who can’t (or won’t) pay up (often when they have just had their turn receiving the money), borrowers who default on their payments, and the risk that a stokvel can become a monetary loss. So finding a group you can trust seems to be a key ingredient in the success and longevity of a stokvel. But when you do, the benefits are clear and manifold.
Beyond the actual rands, stokvels can develop financial skills and insights, helping people to become more aware of their spending habits, to plan, cultivate a habit of saving, be more future-focussed and put into practice concepts like re-investing, loans and interest. And they do so in an informal space and in a practical way, outside of the definitions provided in a finance textbook.
There’s also a misconception that Stokvels are just about money. They’re about a group of people with a common financial goal, but who also rely on one another in ways that extend outside of this space. Even in a basic stokvel, meal share and conversation are a prerequisite. But it goes much further. For instance, if a member has the misfortune of having to organise a burial for someone in their family, often it’s these same women who will pool their resources together, offering support in the form of helping hands to do the grocery shopping, prepare the meals and wash the dishes. This means less stress because there are people willing to give of their time and fill that role.
This applies to more modern stokvels, too. Even with the black middle class that is looking to fund their more leisurely pursuits, stokvels have come to incorporate a space in which to find or offer emotional support, interact socially, and swap stories over a good meal. My sister partakes in one with women in similar careers to hers. She’s got a number of properties, assets and investments under her name and is well versed when it comes to stocks, trading, and a complete set of jargon that flies well above my head – and she’s a classic example of a modern woman who understands that the value of a stokvel is far more than its financial reward. There’s the added benefit of enjoying the company of like-minded women. Friendships blossom out of sharing career goals, experiences, opinions, ambitions, anxieties and advice – all over a meal that the hosting member has prepared.
Stokvels can offer a supportive community structure that extends outside of monetary implications. They can include someone to lean on in hardships, and someone to laugh with in celebration.
Photo By: SSG Robert Stewart vial Flickr. CC by 2.0