Millions of people benefit from being members of savings clubs, or stokvels. The beauty of saving as a group is that members can motivate one another, socialise and have fun, all while growing their money.

Stokvels have become a savings staple in South Africa, where we pool our money with others we trust in order to save for a common goal. This could be anything from Christmas groceries to weddings or, for young urban dwellers possibly holiday travel, property or building (which is a growing trend).

In the past, it was mainly rural folk who belonged to stokvels, but not any more. An investment monitoring survey recorded an 11% rise in membership among high-income earners (who earn more than 40 000.00 a month) between 2009 and 2017. And 70% of black working urban households have at least one type of informal savings product like a stokvel, burial society or grocery scheme, with the average monthly contribution per household around 860.00.

According to the National Stokvel Association of SA, the stokvel economy is worth nearly 50 billion rand, with more than 800 000 groups across the country. Most have at least 12 members, and 57% are women, so stokvels are giving women more money power.

Get together with a dozen trusted, like-minded people – family, friends, colleagues or neighbours – who share your savings goals, and talk it through over tea or a meal. Thamsanqa Cele of Absa Group says that nowadays, the more sophisticated stokvels work on referrals, which means you need to be referred by someone who is already involved in the group in order to be accepted as a member. He adds that these are often stokvels that deal in large sums of money for investment purposes – for instance in property – and also to build capital in order to start formal businesses.

Together, you need to draw up a constitution, which is a document that sets out all the rules of the stokvel as well as its aims and the principles behind it. It should detail how much, and how often, each member will contribute, and how the money will be invested. It must also set out when and how withdrawals will be made, and by whom. Other important points that must be covered are what will happen if a member misses a contribution, opts to leave the stokvel or dies, for instance, and the process for new members to join.

Set up a bank account with at least three signatories. This means that all three of these people must sign all documents on behalf of the stokvel, to prevent individual members taking things into their own hands. Clear and detailed records must be kept of all financial dealings of the stokvel, and must be available for members to check at any time. An independent person (who is not allied to any of the stokvel members) must also check these records every year to make sure everything is in order.

Most major banks offer stokvel options and benefits, so do your homework, weigh them up and decide together where you will go.

Absa has partnered with various organisations to provide stokvels with additional value. Absa Travel Club comes with travel and accommodation discounts (as long as there’s a minimum of 1 000.00 in the account); Absa Grocery Club is for customers wanting to save for bulk groceries. Absa Investment Club is suitable for groups wanting to invest together to create wealth. All of this with no monthly management fees, but fees will apply to transactions on the account.

First National Bank also has a Stokvel account that charges no monthly fees.

Nedbank’s Stokvel account needs a 100.00 deposit, and you pay no monthly fees on a Pay-as-you-use account. Members can also get 10 000.00 burial cover at a cost of 20.00 a month per member, and a discount of up to 10% on groceries or school supplies when they shop at partner stores, provided the stokvel deposits at least 1 000.00 into the account each month from January to October.

Standard Bank’s Society Scheme also needs a 100.00 opening deposit. If the monthly balance is kept at 5 000.00 or more, no account fees are charged and cash prizes are also offered in regular draws.

Contribution stokvels
Members agree on a fixed contribution. A lump sum is then paid out on a rotation basis. For instance, if there are 12 members and payments are made monthly, one member receives a lump sum each month (the total contributions of the other members). After all have had their turn, a new cycle begins.

Investment stokvels
The contributions by members are invested and the payouts distributed. The payouts are usually slightly more, because investments earn interest.

Basic stokvels
Unlike contribution stokvels, basic stokvel members are paid only in the case of circumstances that have been specified and agreed on by all members, such as a death in the family.

Event stokvels
Members contribute towards a hosted event. An entrance fee is charged and beverages and food are sold, for example, and profits from the event are split among the members.

Grocery stokvels
Members contribute a fixed monthly amount for a specified time, after which the money is used to buy groceries, vouchers or coupons for all members.

Purchasing stokvels
Money-generating assets are bought using members’ contributions. Assets are then rented out to generate additional income for the stokvel.


  • Only join a savings group with people you really trust. If it seems too good to be true, and wild promises are made of doubling your money soon, steer clear! 
  • If possible, avoid making cash deposits and withdrawals at the bank. If you must, don’t do so on high-risk days (around month end), and do take other club members with you. 
  • Again if possible, arrange for members to deposit cash directly into the club’s account, and for payouts to be electronically transferred to each of their personal accounts. 


START A SUCCESSFUL STOKVEL START A SUCCESSFUL STOKVEL Reviewed by Jet Club on February 27, 2020 Rating: 5
Powered by Blogger.