FNB data shows that 23% of their stokvel members are seniors, and 37% of their stokvels have two or more senior members in their groups. This may indicate how tradition is being passed down to the younger generation as seniors and youth are part of the same stokvels.
“Group savings have historically been used as a collective savings vehicle to help adults raise families and create communities of like-minded people, and senior citizens continue to embrace this culture while passing on knowledge and principles to younger generations,” says Cebile Magongo, Strategic Business Developer at FNB Cash Investments.
“We have observed that seniors save in stokvels for a variety of reasons. Some of the trends of members joining stokvels are for social benefits, such as organizing group trips or getting together for events at various locations. They believe that its crucial for people of their age, as it helps them to socialize, because they are likely not to be actively working and may use stokvel gatherings for purposes other than just collecting contributions,” adds Magongo.
Our data further indicates that stokvels with more senior members are prevalent in the Eastern Cape with 34% followed by Limpopo with 28%, this isn’t surprising as what started as stock fairs and eventually evolved into stokvels originated in the Eastern Cape. The growth in Limpopo speaks to the strong culture of community which is a favorable breeding ground for the practice of collaborative savings.
Members continue to adopt FNB’s digital stokvel solution due to its minimal administrative cost – no monthly account fee, transparency, and accountability as all stokvel members can see the stokvel balance. This allows seniors to maximize their savings without incurring high fees.
Being a part of a Stokvel is one of the most popular ways that South Africans foster a culture of saving. The challenge has always been in ensuring that the stokvel savings are effectively managed to satisfy the objectives of the stokvel group.
“Stokvels have been instrumental in promoting a culture of saving and encouraging groups to save towards a common goal. We continue to see this as more seniors are becoming cautious about their finances and often prefer to save in stokvels because of the low risk and familiarity with the stokvel concepts,” concludes Magongo.
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