Stokvels Trends- Cash is king
Stokvels are informal savings clubs that have been popular for years. They are often used as savings tools for members. Some of the benefits that come with being part of a stokvel include easy access to cash, transparency and simplicity.
Members also appreciate that there are no hidden costs, no credit checks and saving is forced by being a member. While saving with banking institutions has its own benefits, stokvels offer more advantages as an informal saving tool.
Savings are generally used to help members pay for everything from burials and celebrations to school fees and groceries.
Over the years, stokvels in South Africa have become increasingly popular and are no longer only associated with middle-aged baby boomers.
What remains true is that when it comes to stokvels trends, cash is king.
There are new trends developing:
Research indicates that approximately R4.4 billion is contributed to stokvels annually. The saying “cash is king” truly resonates with trends in this industry.
There have been new applications developed. Such as the StockFella app. This app enables members of the stokvel to digitally track the finances of the group and its individuals.
Many stokvels are investing money instead of just saving. According to research, more stokvels are using their contributions to invest and earn high interest. More members are realised that by leaving their money lying in savings accounts at the bank isn’t doing anything for them.
The National Stokvel Association of South African NASASA), which was established in 1988, has seen an increase in the prevalence of stokvels in South Africa.
The financial industry is responding to these developments by creating specialised products.
Members get to benefit from tax-free savings allowances.
The industry is growing faster than the pension fund industry.