Stokvels in South Africa) a savings or investment society to which members regularly contribute an agreed amount and from which they receive a lump sum payment
Stokvels are invitation-only clubs of twelve or more people serving as rotating credit unions or saving schemes in South Africa where members contribute fixed sums of money to a central fund on a weekly, fortnightly or monthly basis. The name “stokvel” originated from the term “stock fair s”, as the rotating cattle auctions of English settlers in the Eastern Cape during the early 19th century were known.[
Stokvels generally have a constitutionwhich dictates the size of the contributions, when the accumulated money is to be paid out and the roles and responsibilities of the members. After a savings period dictated by this document it could be specified that each month a different member receives all or some of the money in the fund, which was collected during that period. Defaults on contribution are quite rare as other members will know if you haven’t paid your contribution, and also because the regular meetings are a reminder of what you will gain when it is your turn. Depending on the type of stokvels, the members can use the collected fund for their own use, for payment or investment purposes.
It is estimated that one in every two black adult South Africans is a member of at least one of 800 000 stokvels. Black adult South Africans invest approximately R50 billion in stokvels a year.
