The age-old stokvel moves into the digital era

Can the stokvel, the home-grown savings institution tried and tested over the ages, go digital?

At least two startup fintech companies reckon so, arguing that bringing zeros and ones to the traditional way of doing things offers a stockpile of advantages.

An amount of R44-billion is collectively saved in 820 000 stokvels in the country annually, with more than 11-million South Africans being members, according to Nedbank’s research.

Now the two startups are digitising traditional stokvels in order to boost savings and make them more transparent and convenient.

A traditional stokvel is a saving scheme whereby members agree to contribute a fixed amount towards a certain goal on a regular basis.


The savings pool is usually accessed on a rotational basis.

Stokfella is an app that was launched in 2016, it is an online savings account enabling traditional savings clubs to manage their administration, monthly payments and claims by using devices such as mobile phones or tablets. The platform boasts about 14 000 users, and does more than a million transactions annually.

Members of Stokfella have two savings account options, depending on their targets and time frame.

The Nala Savings — for users who claim on a frequent short-term basis — pays an interest rate of 4.2%, whereas the Nala 32 Days — for those who would like to keep their money for longer on a greater interest return — accrues 5.2% interest.

Stokfella founder and chief executive Tshepo Moloi says the platform started as a tool to resolve administrative issues, such as collecting slips from members which he experienced firsthand in a stokvel he started. Previously a banker, Moloi says his experience helped him set up the app.

“In my years of banking, I was able to say: ‘Okay, let’s pivot towards becoming an online savings account that is digitally secured, convenient and transparent’,” said Moloi.

“You know, when you want to make claims [in a traditional stokvel] you need to have all the stokvel people who handle the books and money, known as executives, under one roof, walk to the bank, where you would stand in long queues,” he explains.

Mothupi Kgopa, a farmer and a mathematician, is part of three stokvels which use the Stokfella platform to fund business expansions in manufacturing and farming.

“I’m a firm believer in using stokvels to turn around the economy. As black people we [do not own] assets, so a whole lot of us when we need money we go to the bank and you’re probably gonna get rejected,” he said.

Another smartphone app, Franc allows members to join its stokvel, giving access to high-performing, low-cost investments which are with the Allan Gray money market fund (with an average return of 7.87% per year) and Satrix Top 40 (which has an average return of 13.6% per year since inception in December 2000).

Members use the app to manage their investments.

“It is like any other stokvel where members invest except we help them make better investment choices and give them access to better products,” said Sebastian Patel, chief operating officer of Franc Group.

Users can invest with as little as R5. An annual fee of 1% on their investment is charged. The amount includes an underlying fee which the fund manager charges, this is 0.29% in the case of Allan Gray and 0.14% for the Satrix Top 40.

“What we are trying to do is to make investing simple and accessible for everyone. A lot of people might save through stokvels at the moment, but a lot of that money is going into a savings account in a bank with low interest rates.

Since it launched 18 months ago, the app has been downloaded about 6 000 times, 1 600 people have registered, and there are 155 active users with R1.1-million invested so far.

“One of the issues with a traditional stokvel is that you find that it sort of revolves around how the members feel at the time and their finances,” says Sandile Gcabashe who uses Franc to put R1 000 a month into the Satrix Top 40.

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Tshegofatso Mathe
Tshegofatso Mathe
Tshegofatso Mathe is a financial trainee journalist at the Mail & Guardian.

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