The South African stokvel industry has remained resilient in the face of COVID-19, which has slashed income, research from FNB shows.
Sifiso Nkosi, FNB cash investments growth manager, said despite expectations of a decline in stokvel savings from March, stokvels have grown by double digits compared to last March. “One thing that has become apparent is that since the 26th of March when the [COVID-19] lockdown was instituted in South Africa, stokvels have not stopped contributing. When we look at the performance month on month since March, we see a positive trend,” Nkosi said.
“We expected contributions to start dropping from April, but that has not been the case. April performed better than March, with May reaching an even higher performance than both March and April. The trend continued into June.”
Stokvels have a strong social contract that binds members together. The key characteristic of an average traditional stokvel is monthly or quarterly meeting, hosted by one of the members.
A survey by the Stokvel Academy found that 63% of stokvel members belong to a grocery stokvel, 27% belong to saving or investment, 5% belong to burial and another 5% belong to loans and other stokvels.
The study also found that 65% of the respondents say they will continue to buy their bulk groceries at the end of the year, while 79% of the respondents are still making their monthly contributions despite the pandemic.
Busi Skenjana, the founder of Stokvel Academy, said stokvels have found creative ways to continue interacting, with WhatsApp being the most popular platform for communication. “Bear in mind that the majority of grocery stokvels are social-grant recipients and quite a good percentage of them are government employees. These two categories of stokvel members are not affected in terms of monthly income, except for the additional responsibility of supporting unemployed family members,” Skenjana said.
Lynette Nicholson, the head of research and insights at Old Mutual, said it’s data show informal saving continue to be popular. “Although membership of stokvels fell from 44% to 34% this year, there are more people now contributing to grocery schemes and burial societies,” said Nicholson.
