As the country’s unemployment rate reaches an all-time high, stokvels have become a key financial vehicle that many rely on for sustainable income.
According to the National Stokvel Association of South Africa (Nasasa), there are roughly 810,000 active stokvel groups consisting of more than 11 million South Africans, that collect an estimated R50 billion annually.
At least 40% of the country’s adult population are members.
Thandiwe Booi, who has been running the Umgalelo stokvel for more than 60 years, said this was their way of reclaiming a self-reliance mindset and creating financial freedom for the black community.
In the #WomenReadyToLead webinar with Prof Thuli Madonsela, Booi said the stokvel moved from just buying December groceries to loaning each other money for rainy days and opening businesses.
She also said as a single mother and a retired teacher, the Umgalelo stokvel has helped her and her family send her children and grandchildren to school.
Apart from buying her house for cash, it has also helped buy groceries for many families in her community.
“Unemployment has always been an issue and now the situation is people are losing their jobs,” said Booi.
“Many people do not have jobs, our children are not working and our grandchildren have to go to school. And a lot of families are struggling and instead of looking for a job this is how we live.”
According to Discovery Life, black women have had to bear the brunt of high unemployment levels with at least 41% of them jobless since the pandemic began. Stats SA released its unemployment figures which indicated that the unemployment rate stood at 34.4%, an increase of at least 1.8% compared to the first quarter.
Meanwhile, according to research 82.5% of stokvel group members are women. However 80.4% of those stokvels have not been registered with Nasasa, despite the gazetted exemption notice by the Reserve bank authorising stokvels to practice their trade under the Banking Act 94 of 1990.
The stokvel market has grown remarkably and, over time, the types of stokvels have increased significantly from rotational stokvels, grocery, land and property investments, burial, and right down to social stokvels.
“In the black community, when one person succeeds they have to spread their success to their families and the community and we have done that through stokvels,” she said.
The statistics show that the number of unemployed people increased by 584 000 in the second quarter.