Traditional method is meeting the digital world as stokvels is taking advantage of 21st century technology.
For years, community-driven stokvels have met the financial needs of their members, giving them access to funding for everything, from groceries to school fees.
While it is a great way to get money for your needs, stokvels do not build wealth. This is what inspired mining engineer-turned-banker, Tshepo Moloi, to work on Stokfella.
Stokfella is an app that digitises stokvels and sticks to the traditional values and principles behind the scheme.
“Stokfella was my first socially-based developmental challenge. My thinking was that although the stokvel concept had been meeting peoples’ needs for years, it could work better,” says Moloi.
“With my engineering background, I realised that I could build processes around stokvel operations and then, using my banking experience, marry the processes to a financially efficient model.
“I believe that stokvels are an industry. Like any industry, they operate at different levels and offer services that are matched to customer needs. I found that about 60% of stokvels are still traditional and focus on burial schemes, buying groceries, consumables and other services and that the rest of the schemes concentrate on savings.
“It became obvious that even members of community-based stokvels didn’t realise that they were, in fact, participants in long-term savings schemes. This was particularly the case in burial stokvels.
“People are content to contribute to these structures for many years, knowing that funds are paid out as members pass away.
“The money, instead of being invested for better returns, remains in a basic account. For example, if a scheme on average pays out about R10 000 a year and has total reserves of R100 000, this meant that the opportunity to have R90 000 invested and earning better returns was being lost.”
As a digital platform, Stokfella is aimed at a young generation of savers and investors who are comfortable with the stokvel traditions but also want to build wealth and accumulate funds.
“They want stokvels to work for them and open up investment opportunities by using accumulated funds from like-minded people to invest, in say, a property where they can benefit from the growth of property values and also through rentals,” says Moloi.
Stokfella encouraged people to participate as group of investors in activities like transport and logistics, buy franchises and even invest in start-ups and buying machinery to produce retail products.
The app sticks to the stokvel principle that everyone contributes and everyone shares the benefits.
The advantages of the app is a streamlined administration, improved information flow as well as an interactive base for members to communicate with their stokvels.
People can also create investment-based stokvels, post them on the site and invite like-minded groups or individuals to join their ventures.
Stokfella assists those who want to start community-based initiatives by helping with structuring governance measures that safeguard investors.
IOL TECH