Stokvels still top saving vehicle for many in SA

STOKVELS remain one of the most popular savings vehicles for ordinary South Africans‚ together with funeral policies.

That is according to the latest Old Mutual Savings and Investment Monitor‚ which found that 44% of the 1 000 respondents surveyed used their stokvel money to save for a rainy day‚ while 43% paid off debt.

The survey also revealed 31% used the cash to buy groceries at monthend‚ 31% to buy furniture and appliances and 25% to save for education.

“South Africans are very resourceful and resilient and to cope with rising monthly expenses‚ consumers from all income groups are beginning to purchase their groceries in bulk‚ while shopping for cheaper brands and looking for discounts‚” Old Mutual research manager Lynette Nicholson said.

Economist Mike Schussler said: “Stokvels are a way for people in the lower- and middle-income groups to pool savings and it is often a cheaper way of doing it.

“The member then buys something they really need‚ say a fridge‚ which is also bought for cash. They save on interest payments too.”

Schussler believes stokvels enforce discipline and encourage a savings culture.

“If we look across the country‚ South Africans have many things‚ according to household surveys. We have lots of TVs [over 80%]; cellphones [nearly 100%]; fridges‚ stoves‚ hi-fis‚ furniture, and so on,” he said.

“It also works well for people who do not have a fixed income and give what they can when they can‚ but cannot on occasion buy something.”