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STOKVELS
“It takes someone who has
a business brain to see the
opportunities,” she tells the IMM
Journal of Strategic Marketing.
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Nkgadima believes knowledge sharing
is perhaps the most powerful tool for
engagement available to brands. She
talks about how, within her own stokvel
circle and as an upper-LSM individual,
she helps educate others about more
complex investing such as equities.
“If I can do this, how much more could
financial services companies do?”
she asks.
This view is confirmed by Andrew
Maluleka, a Strategy Executive at
marketing services company Mindshare
and also a lifelong member of stokvels.
He says sectors like financial services
“keep missing the point of a sense of
community and belongingness. Their
approach is too commercially orientated
and cold.” He adds: “They even lack
cultural understanding of different
forms of stokvels and the communities
that they come from. It is not a one-size
fits all [sector].”
Maluleka has been a member of
different stokvels since his high school
days and recalls experiences from that
time. “The stokvels ranged from saving
Many South Africans use stokvels both as a
savings vehicle and a personal loan provider
40 strategicmarketing October 2016 – January 2017
? equivalents – in part because they’ve
People distrust the
massive formal
financial sector
for a year-end school party through
to a birthday stokvel, a shoe-buying
stokvel (we called this one Shoes & Co)
and a stokvel for buying bulk alcohol
or groceries when a member had a
big event.” For him, stokvels fulfil a
budgeting need and “above all, a sense
of community and belonging with like-
minded people”.
Nkgadima adds that stokvels are
not unique as a concept. “In Kenya,
people are empowered to push their
businesses to the next level by making
use of these schemes. It is high time
business [in South Africa] taps into
this,” she says.
Consultant Gabriel Davel, the former
CEO of the National Credit Regulator,
agrees that South Africa can learn
from the approach in other parts of
Africa. “Half or more of Kenyans who
have loans have them with the [local]
equivalent of a stokvel,” he says. Indeed, necessitating stricter rules around what
these Savings and Credit Cooperative
Societies (or Saccos) are bigger and
more sustainable than the South African
learnt how to put their considerable
savings to work for the community.
Davel is quick to point out that
co-operative banks (a financial entity
which belongs to its members, who are
at the same time the owners and the
customers of their bank) in Germany
and Holland started life like this and
subsequently evolved into formal
banks. Co-operative banks make up
about two-thirds of all German retail
banks, according to international
finance and economics writer Frances
Coppola, and the model is certainly
growing in the likes of Kenya, Nigeria
and Rwanda.
“When you compare South Africa
to international trends, things get
interesting,” says Davel. “Kenya is the
co-op [leader] in Africa, then Senegal.
Ireland and Canada are huge; some
Canadians are part of a co-operative
all their lives. Even the US is bigger
than we are.”
While the success of stokvels is
they can and can’t do, the problem,
says Davel, is that “we’ve never had the
discipline to [regulate them properly]”.
There is also a lack of trust for South
Africa’s massive formal financial sector,
which simply hasn’t managed to break
into the market.” PHOTOS: ISTOCKPHOTO, GETTY/GALLO IMAGES, SUPPLIED
STREAMLINING STOKVELS
Maluleka observes that many stokvels
are now evolving to be more organised
and design their model in a way that will
allow the benefits to be more scalable
and financially self-sustainable.
Davel points out that, in bigger
stokvels such as burial societies, this
is already starting to happen and they
are adopting a Kenyan-type model of
supporting emerging businesses. “Burial
societies sit with cash surpluses, so
they act as microlenders for township
vendors looking to expand,” he explains.