Johannesburg, 10 June – If harnessed correctly, stokvel’s could be the driver that South Africa needs to significantly enhance discretionary savings levels to bolster the economy. With over 11 million South Africans being members of stokvels, a total of R44 billion is collectively saved in 820,000 stokvels in South Africa annually.
According to the National Stokvel Association of South Africa, the stokvel market is worth more than some of South Africa’s largest businesses. By geographic spread, provinces where the country’s top savers reside, Gauteng is the top ranked followed closely by Limpopo. Together with North West and KwaZulu Natal, these four provinces make up 70% account for 70% of the stokvels in the country.
This research also showed that when broken down by gender, 57% of people that are members of stokvels in South Africa are women while 43% are men.
Data from research conducted by Nedbank indicated that the most popular types of stokvel are savings stokvels, grocery stokvels and burial societies. Two-thirds of grocery stokvels make bulk purchases from various retailers and wholesalers once a year in quarter four. In line with this, the Nedbank Stokvel account provides discounts of up to 10% on groceries and school supplies at leading retailers, with R551 000 worth of Shoprite vouchers already having accrued to Stokvel account holders.
Since its launch in September 2018, Nedbank’s Stokvel account has already attracted more than 3 541 account holders, and has insured 88 900 lives through its innovative burial cover solution. This initial success demonstrates that informal savings groups like stokvels are ready to enter the formal financial system provided they can see the benefits of doing so, says Sisa Cikido, Head of Retail Investments at Nedbank.
According to African Response, 41% of the stokvels are banked and this has served to bring more South Africans into the formal financial services sector by giving them access to other savings, investment and protection offerings.
Ms Cikido notes that only 5% of stokvels are focused on investment savings. This reflects the fact that South Africa has the lowest savings rate amongst G20 countries. Of those that do save, 40% have their money invested in low- or no-interest accounts. To help the country and its citizens achieve their economic goals, a smarter savings culture driven by accessible products has to be built, she argues.
The Nedbank Stokvel Account offer competitive interest rates and access to affordable funeral cover, Stokvel Account holders are now eligible for the Nedbank Pay-As-You-Use (PAYU) bank account. PAYU accounts no longer attract monthly fees thus making it possible for more South Africans to enter the formal banking system. Stokvel members with PAYU bank accounts obtain further transactional banking value added services at no additional cost.
“Stokvel members are already savers, so the solutions Nedbank offers them are a genuine entry into the formal financial system. We believe that by helping stokvel members to use their existing savings to grow more wealth, we can make a real contribution to changing the face of the economy and building broad-based wealth,” she says. “Making the banking system truly inclusive does not only benefit individuals, but also strengthens the economy as a whole. We will continue to add to the benefits this account offers as we deepen our insights into what this increasingly important customer sector wants and needs.”
Nedbank is the market leader in the Stokvel product category and the first service provider that allows clients to open an account digitally via the USSD string *120*001*7865835#.