OPINION | Could coronavirus threaten the benefits of stokvels for SA savers?


In low-income groups across southern Africa, informal economic initiatives and other self-help systems have often provided a buffer against the vagaries of broader economic and social circumstances.

In South Africa, belonging to a "stokvel" (known too as mohodisana, gooi-goois, kuholisana, and makgotlas) has become one of a number of important survival strategies.

Stokvels - essentially, pooled savings schemes - range from savings to investment and burial schemes, and have become an informal social security net in one of the most unequal nations on earth.

Stokvels supplement monthly income, and can help to achieve greater gender parity in that many women start their own stokvels, which is empowering and enhances economic stability.

Money from stokvels can serve as start-up capital for income-generating activities and act as insurance against uncertainties and emergencies. It builds the capacities of the poor to ride out poverty and assists in building up financial assets through savings.

In South Africa, over 11 million people belong to one or more of the 800 000 stokvels in the country. In 2019, a report by Glacier estimated that South Africans invested nearly R50 billion in stokvels.

Coronavirus and stokvels

However, the emergence of Covid-19 has put stokvels at risk and poses uncertainty for their survival.

The imposition of social distancing means the close in-person contact with others, and community meetings - a core pillar of the stokvel – are prohibited.

But to avoid total collapse, and the devastating social fallout, there are some immediate measures that can be taken to help stokvels survive: 

  • Prioritise safety precautions, for instance: avoid holding hard cash but adopt electronic transactions to prevent the spread of the virus;
  • Keep the lines of communication open to avoid panic;
  • Improvise innovative ways to maintain a form of contact without spreading the virus, such as using text messages as a vehicle to maintain social distancing;
  • Encourage members to keep in touch regularly via other means as well, such as phone calls or video chat, while maintaining physical distancing.

The value of social contact is clear and the Covid19-induced lockdown has shown us that, in may ways, life is not sustainable without human interaction.

But the lockdown has also offered other surprising opportunities for stokvels, such as advocacy for accessible technology and banking services, and the ability to consider how to adapt to change and address radical uncertainty.

Dr Norman Chivasa is a post-doctoral fellow at the DSI-NRF Centre of Excellence in Human Development, hosted by Wits University. Dr.Chivasa is interested in community-based peacebuilding initiatives and informal infrastructures for peace and development. Notably, he has facilitated the creation of ward-level peace committee and village peace committees in Zimbabwe. Views expressed are his own. 

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