Stokvels, burial societies and other savings clubs face uncertainty about their funds after the VBS Mutual Bank was placed under curatorship by the South African Reserve Bank on Sunday.
VBS shot into the public eye after lending then-president Jacob Zuma R7-million for his Nkandla home.
As a result of the curatorship, some of the bank’s clients, which include savings and burial society clubs, in Thohoyandou, where the bank has its main branch, were unable to make withdrawals this week. At least three stokvel groups said they were pondering their next move.
“Since the news of the bank broke, we have been moving up and down inquiring and seeking assurance over our money. But [we have decided] it’s not safe. We are moving our investment elsewhere,” said one Thohoyandou stokvel group leader, who asked to remain anonymous.
Others also asked for their identities to be withheld, citing fears that their comments could compromise their savings.
“Remember, it is still early in the year. We had two months’ investment directed to the bank already. Though it was not much, we are scared that we will wake up one day and find the bank closed,” a stokvel member said.
Another said the crisis not only confused them but also created division among the club’s members.
“We are going to have another meeting over the weekend. We are now divided and such divisions in the clubs give birth to a split. Some members were not happy that we are using a local bank but lost in the votes, hence we ended up here,” she said.
On Thursday, some of the bank’s clients said they were negotiating to have funds released for this weekend’s burials.
“There is no sign that we will get money from the bank. They only promised [to give us] R1 000,” a burial society member said, adding that the amount would not cover the costs and this was causing panic and frustration among members.
A traditional leader in the area, who did not want to be named, said his community had its council and burial club savings in the bank, which worried him.
“We thought the bank was a safe place to invest and keep our money but now we have been thrown in a dilemma. We hope that the South African Reserve Bank will secure our money,” he added.
In August last year, the Limpopo provincial government sent a message to its municipalities ordering them to withdraw their money from the bank. But the Elias Motsoaledi municipality, like many others, did not heed the call.
The leader of the Bolsheviks Party of South Africa, Seun Mogotji, said the municipality should be investigated. He said there were signs that the municipality and others had been forced to invest in VBS.
“We are worried and wondering as to who is forcing them to invest money into that bank,” he said.
Mogotji alleged the council had been planning to invest an additional R40-million in the bank when the news of its collapse broke.
Limpopo provincial government spokesperson Phuti Seloba said: “We warned them [the municipalities], and their councillors know that, if they are the ones who took wrong decisions, they know they are individually and collectively liable. They must face the music,” Seloba said.— Mukurukuru Media