Investing in your Inner Circle

Investing in your inner circle blog post by Afrika Kesho discussing stokvels


Over the years, many of us grew up surrounded by community savings schemes, also known as stokvels. These are informal saving methods that operate on a rotation of funds between a group of individuals varying from friends and colleagues, to family members. The group pools a certain amount of money, R100 each for example, and agrees on how often the money rotates as each member takes turns getting the lump sum from the collection.

Generating approximately R49 billion per annum in Southern Africa, many communities partake in such schemes with the basic intention of saving money for a future need that might arise. The most common types of stokvels are:

  • money lending stokvels
  • groceries stokvels
  • alcohol stokvels

All of which hardly earn any interest.

Stokvels prove to be beneficial in that they discipline individuals who are willing to save part of their income, but fail to do so in their personal capacity. Even so, a few challenges arise due to the lack of formal regulation procedures to ensure accountability and compliance by each of the members. Loopholes such as these and a lack of financial education to aid the organizations on ways to spend or reinvest this money leads to the ultimate collapse of an otherwise potentially successful investment opportunity.

A group of ladies in a stokvel meeting

Regulation around Stokvels

The rising number of people who wish to see their money grow has caused society to fall victim to certain “get rich quick” schemes that are disguised as stokvels and promise high returns at high speed with low risk. This includes pyramid schemes such as the infamous MMM, Longrich and most recently the R200 Whatsapp Group that has robbed numerous citizens of their hard earned money and caused many others to shy away from joining any stokvel whatsoever.

Regulations such as registration under The National Stokvels Association of South Africa (NASASA) provides stokvel members with legal protection as they would formulate a Stokvel Constitution which governs the functioning of the stokvel and emphasizes the main objective of the money collected (funds pool), and gives a watertight agreement with which to hold every member accountable for their respective contribution; this method counters the trust issues that individuals have when it comes to stokvels.

National Stokvel Association of South Africa

Stokvels earn little interest, if any

Many stokvels earn little to no interest on their funds pool due to the fact that they operate the pool in an ordinary savings account without exploring options, such as investing the money into:

  • money market accounts that earn compound interest
  • unit trusts
  • investment into the stock exchange
  • or even something as simple as opening an Old Mutual savings and investment account


Most recently, African Bank created a My World investment account, which would be an excellent way to for all members of the stokvel to monitor what happens with their money, all from their own internet banking sites. The account is linked between the account holders and grants up to 6 members access to the account by giving each member their own bank card. There is also an option to add 2 different accounts to the main account which earn an interest rate of up to 6.5%.

African Bank MyWorld account picture

Consider joining or starting a Stokvel

Stokvels have the opportunity to evolve and tap into the technological world by making use of apps such as StokFella that increase transaction and communication effectiveness within the organization (stokvel).

With focused governance and efforts towards achieving the money growth objectives, there’s little room for doubt about exploring the world of financial growth schemes such stokvels.

Image sources:


This article was written by Karabo Rantho.

You can contact Karabo Rantho by clicking on the social media buttons below, or by emailing her on:

Follow Us

Follow Afrika Kesho on all our official social media accounts:

Share this post with your friends!

Help us educate more people by sharing our posts using the social media buttons below. Thank you!

Categories Uncategorized