For spoilt white kids, the only thing they know about ‘stokvels’ is they are some kind of saving scheme that their ‘maids’ are involved in. It’s so much bigger than that..

According to Wikipedia:

Stokvels are invitation only clubs of twelve or more people serving as rotating credit unions or saving scheme 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 fairs”, as the rotating cattle auctions of English settlers in the Eastern Cape during the early 19th century were known.

Stokvels generally have a constitution which dictates the size of the contributions, when the accumulated money is to be paid out and the roles and responsibilities of the members. Each month a different member receives 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. Though defaults have become increasingly more common due to AIDS and the economic crisis. Depending on the type of stokvels, the members can use the collected fund for their own use, for payment or investment purposes.

Some of the data shown on Wikipedia is slightly outdated. So here are 5 facts you didn’t know about stokvels.

1) Stokvels in South Africa are worth an estimated R25 BILLION

2) 23% of our population are involved in stokvels

3) There are 421,000 stokvels in South Africa.

4) An average stokvel has around 31 members, sometimes as big as 100

5) The average contribution to a stokvel is R134 a month

Interesting. I wonder how their returns compare to Allan Gray?

[fin24]