A stokvel is a savings scheme by group of people who save a regular amount each month, say R100.00. Each person then gets a chance to have the month’s collected cash. Urban legend has it that stokvels are so addictive that members sometimes save enormous amounts relative to their earnings.

Recently, the government, through agencies such as the National Urban Reconstruction and Housing Agency (NURCHA), developed programmes that will secure housing loans for people earning less than R2000.00 a month who have a proven track record of saving through schemes such as stockvels. Low-income families have been saving through stokvels and burial societies for a long time. It is estimated that there are at least 2000 stokvels in the country.

Minimum investments into stokvel investments are very low – in fact, they are at the discretion of the people forming the stokvel. However, an important element of the stokvel model is trust. Members have to be fairly confident that the other members will keep up their monthly payments, especially after having received the cash.

Credit Unions 

Members with a certain common bond may get together to start a savings and loans scheme. A strong sense of trust is important as loans are made available to members after a predetermined period of saving. In South Africa the credit unions are governed by the Savings and Credit Cooperative League of South Africa (SACCOL). Saccol is affiliated to the African Confediration (ACCOSCA) and the world body, the World Council of Credit Unions (WOCCU).