STOKVELS in South Africa are estimated to be worth about R25bn and to have about 8.6-million members, a survey on the huge informal savings market has found.
No formal relationship had been established between the banking industry and stokvels, but Banking Association of South Africa MD Cas Coovadia said on Thursday this was something the association was looking at.
The survey, by market research company African Response, found that less than half the funds stokvels collected were saved or invested, meaning they represented a significant potential market for banks.
Stokvels are traditional collective savings schemes, which typically involve members making a regular contribution to a pool from which each member in turn receives as a once-off lump sum. The purposes of schemes vary from covering the costs of burials, groceries, investments and birthday celebrations, or to save.
The nationally representative survey found that there were an estimated 421,000 stokvels in the country, representing 23% of the adult population.
The African Response survey was undertaken between February and April this year.
African Response MD Mamapudi Nkgadima said the largest segment in the stokvel market by far was burial stokvels, which have overtaken their saving counterparts as the most prevalent type. Saving stokvels account for the next-biggest group, followed by grocery stokvels.
“What we have found as a general trend is that stokvel members are rationalising the number of stokvels that they belong to,” Mr Nkgadima said.
On average, stokvel members belonged to 1.3 stokvels, while the number of individuals belonging to them had increased to an average of 31 members.
“This makes sense in the context that burial societies are now the biggest segment in the stokvel market, as they are typically bigger groups” Mr Nkgadima said.
Membership of burial stokvels went as high as 100 members per group, while savings, investment and birthday stokvels had fewer members as they would not cover essential needs and would typically consist of a close group of friends, the survey shows.
The average contribution for a burial stokvel was R134 a month per member. This was lower than the R190 a month per member average across the different types of stokvels.
Mr Nkgadima said he believed stokvel members should be encouraged to explore other, value-adding ways to strengthen their collective savings.
Mr Coovadia said one of the divisions of the Banking Association was looking at how it could utilise informal, community-based savings institutions such as stokvels to extend the delivery of financial services. “It is certainly something on our agenda.”
The aim of the interaction between the association and informal schemes would be to deliver financial services both to the stokvels as organisations and through them to the individuals.