Stokvels as alternative microfinance institutions : conversations with women from Venda

Abstract

Stokvels have been around in South Africa for many years and they are a way that people motivate each other to save. The study explored the operations of stokvels in order to identify features of stokvels that make them successful and why they remain popular in Black communities even with people who have access to formal financial institutions. The study further explored if there were gender preferences for stokvel groups and the reasons thereof. Exploratory research in the form of three focus groups was conducted with women stokvels in Venda in the Limpopo province, South Africa. All the groups have been in existence between seven and thirty years. The women were asked questions to determine why they choose to participate in stokvels and also what it takes to make the groups successful. The study found that the success of stokvels is that they are driven by a purpose which is beyond money, they exist to assist the members improve their lives. The members take the rules seriously because they do not want to disappoint each other. Trust and social capital were found to be critical in ensuring success. The women said that stokvels forced them to save through peer pressure, and they appreciated the relationships that they were able to foster in the stokvels. Those who had no access to formal financial institutions found that the stokvels gave them access to funds that they would not otherwise have thereby making it possible for them to achieve a higher standard of living. Women were found to prefer other women as members in their stokvels groups.