South Africa’s savings powerhouses get additional boost

The end of the year is always a tough time financially; all the expenses of the festive season are quickly followed by the demands of the back-toschool crowd. And let’s not forget how many South Africans are unemployed, adding to the burdens.

In true Mzansi style, South Africans have their own, long-established and highly practical response: stokvels. Stokvels, or savings clubs, have been around for generations, and create mini communities in which like-minded people can meet regularly to socialise and support each other in keeping up their monthly contributions. Stokvels are wildly popular because they work on so many levels.

Many see stokvels as an important counterweight to South Africa’s undeveloped savings culture. Figures show that the country’s household savings rate declined to a worrying low of 0.2% in the second quarter of 2022. By contrast, stokvels demonstrate just how valuable consistent saving can be.

HELPING SA SAVE

“South Africans are notoriously poor savers, which impacts the economy as a whole as well as families’ ability to ride out tough times. As we saw during the Covid lockdowns, stokvels helped many people to survive the catastrophic loss of income,” says Sisandile Cikido, head: Retail Investments at Nedbank. “Because of their key role in building financial stability and advocating for savings, Nedbank has developed savings products specifically designed to help stokvels access extra benefits and give their members a little rocket fuel.”

Nedbank’s stokvel account offers many advantages. There are no monthly maintenance fees, and the interest earned is based on how much is in the account. Funds are immediately accessible. Members with a Nedbank PAYU account can receive their funds immediately and securely.

Each member under the age of 65 is eligible for the R10 000 burial cover benefit for a low premium of R25 per month. Another benefit is a discount of up to 10% on groceries or school supplies when shopping at selected Nedbank partner stores.

“Discounts are becoming ever more crucial in the current cost-of-living crisis,” Cikido observes.

The bigger picture is that by opening a Nedbank stokvel account, the stokvel is able to realise the substantial benefits of digital banking. These include easy transfers to members and the ability to use USSD to open and manage the account, and add members to the funeral benefit. It also virtually eliminates the need to visit – and queue at – bank branches .

The last-mentioned benefit is more than just a convenience. During the lockdowns, unbanked stokvels could not collect and distribute money in person, while stokvels with Nedbank accounts were still able to receive deposits and make transfers.

“The proof of the pudding is in the eating, and South Africa’s stokvels are turning to the Nedbank stokvel account in growing numbers. More than 153 000 stokvel members are using us to maximise their savings, benefit from the advantages of digital banking, and score on the discounts and offers we negotiate for them,” she concludes. Make sure your stokvel gets all the benefits of Nedbank’s stokvel account – find out more and sign up by dialling *120*001#.

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