Chronicle Editor
Michelle Moyo, [email protected] HARNESSING the power of community, stokvels have become a lifeline for countless households across Africa. These time-tested savings clubs offer a powerful tool for collective economic empowerment, allowing members to weather financial storms and build a brighter future.
For generations, stokvels have been the bedrock of financial resilience in many communities. By pooling resources and investing in a shared fund, individuals can build a safety net, invest in income-generating activities, and boost their financial inclusion.
The collectively raised funds often flow back into households, businesses, and investments, strengthening financial resilience and propelling prosperity. Stokvels are more than just savings clubs; they are engines of financial empowerment, promoting a culture of saving, investing, and overall economic growth among their members.
Economist Prosper Chitambara recognises the unique value of stokvels, highlighting their ability to facilitate saving in a familiar and trusted community setting.
“The funds raised find their way into household expenditures. Business investments made and profits thereafter are being channelled towards the household thus increasing household financial stability and security,” said Chitambara.
Chitambara further said stokvels, driven by their collaborative savings model, can be a game-changer for SMEs. They provide easier access to loans, allowing entrepreneurs to meet critical business needs and mobilise capital for investment. This ultimately fuels growth within their businesses.
“Most people in the informal sector don’t have formal access to credit or banking because of mistrust of formal traditional financial banking institutions fuelled by perceptions of high fees end up seeking the informal savings and investments schemes.”
Chitambara highlighted how stokvels foster a spirit of mutual support among members
“They provide critical, social protection benefits to their members, however, it is only based on mutual connection and trust among their SMEs,” he said.
Chitambara further underscored the crucial role stokvels play in alleviating poverty and mitigating the effects of drought on families and communities. These community-driven savings clubs act as a buffer, enabling members to access financial resources during difficult times.
Building on Chitambara’s point, Bulawayo businessman and economic analyst, Morris Mpala, observed a growing trend within stokvels. Some groups have begun offering loans to members at concessionary rates.
This not only improves accessibility but also allows contributions to earn interest, typically shared at year-end. This interest element incentivises saving and further strengthens the financial well-being of members.
“These are offering savings, banking facilities as it were, loans for their business, crowd funding, interest on their savings and crowd funding aspect is a safety net to the community. The usual monthly meeting is a networking process and they cater for emergencies in some cases,” said Mpala.
Mpala identified stokvels as a powerful driver of economic development due to their impact on financial inclusion, literacy, savings habits, and their ability to function as a form of crowd-funding. However, he stressed the need for a more formalised structure that bridges the gap with mainstream financial systems and processes. This could unlock even greater potential for stokvels.
Nust lecturer, Thomas Bhiri, highlighted how members commonly tap into the pooled resources to cover emergency expenses, education costs, business investments, school fees, medical bills, and even household purchases like furniture and electronics. This versatility underscores the crucial role stokvels play in meeting various financial needs within communities.
“In some cases, small to medium enterprises obtain working capital from the stokvels. They ensure availability of funds that can be borrowed to finance household expenses without going through the arduous processes of financial clearance as is the case with banks,” he said.
Inspired by a friend’s positive experience, Stokvel member Synthea Manasa decided to take charge of her financial future. In 2013, she joined a savings group, drawn to the power of collective saving.
Over the past 12 years, this shared commitment has fostered financial discipline and success. In a testament to their collective determination, the group set a goal in 2014 to purchase cars — a powerful symbol of their shared journey towards financial stability.
“We are encouraged to pay up contributions on the day without fail and all members are to be present on the day.
“As for financial discipline, all members are to buy agreed items and not divert funds for other means. No story telling is acceptable and team members are to be composed of people who know each other very well.
“Stokvels have impacted very positively in my household finances. In 2013 I managed to refurnish my kitchen. In 2014, I to bought a car, then in 2015 I advanced my studies and managed to pay my fees with ease. I also managed to help my husband in payment of fees for our two kids who were still in school,” said Manasa.
Stokvels in Zimbabwe are a testament to community ingenuity, offering a diverse range of financial tools to meet specific needs. Savings stokvels promote consistent saving habits. Grocery stokvels empower members to make bulk purchases, stretching their budgets further.
Investment stokvels pool resources for income-generating ventures, fostering financial growth. And funeral stokvels provide a crucial safety net, easing the burden of bereavement expenses.
By offering financial access, promoting a culture of saving, and fostering a supportive community network, stokvels have become an integral part of Zimbabwe’s financial ecosystem. —@Lo7246Lovelyn
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