From Stokvels to Stock Markets

I have been on a journey trying to find ways of touching millions of South African lives by empowering them in Financial skills and encouraging enrepreneurship. This dream is closely coming to reality by day as I dig deeper and trying to understand the South African market.This is a first of the many articles I will share with you as I mine for gold in neglected lands...

What you didnt know about the "poor savings schemes" in the townships!

• Size of market relative to whole population estimate; According to the UCT Uniliver study on the stokvel market, about 2.5 million people belonged to a stokvel excluding burial societies, which then represented 9% of the whole population. And one in every two black people belonged to a stokvel.
• Size of market in value: The same report indicated that an estimate of R 12 billion is invested in Stokvels p.a. Further studies by the Old Mutual Group revealed that grey money (which is money held outside the formal financial institutions) had grown to 33 billion over the past decade and the majority of it was held by Stokvels.
• Social and network economical vehicle evident in all LSM groups (LSM 1 – 10); with mid segments LSM 5,6 and 7 (17%, 16 and 14% respectively) with highest claimed membership. And the two extreme segments 1 and 10 with least claimed membership, 7% and 3% respectively. This is according to a report prepared by Fin Mark Trust – Stokvels in SA (2002)
• The need is evident and quantifiable; The report (Fin Mark Trust – Stokvels in SA; 2002) also states that around 41% of the Stokvel members are un-banked.
  Further to that; according to the Stokvel Company which has 9500 Stokvels consisting of 430 000 individual members, more than 70% of Stokvels review their savings account/ investment portfolio only once a year.With the assumption that the level of formal education has an impact on one's financial literacy levels, only 6% of the Stokvel market members have either a diploma or degree. With 38% having reached a high school level, but only 19% matriculated.
• They are already organised; which makes it easy to access, influence and keep the motivation alive amongst them.
• They are consistent and have a long life span in their nature; and because of that they serve as an excellent vehicle to nurture growth and monitor progress and to evaluate the outcome of recommended programmes continuously so as to amend them accordingly. This approach can also provide an opportunity to have access to a group of people whom you can study behavioural trends and make informed conclusions.
• Wild fire spread of influence; Stokvel members are part of house holds and communities, and whichever skill that has value in their lives will certainly have a room in their homes and conversations with friends. Stokvel members usually don't sign any contracts as a commitment to the group, but trust has remained a loyalty knot that binds all the members to honour their bargain of the agreement and therefore this reflects how much influence will it have, because it will become not only something that they believe in, but it will become part of the culture as much as Stokvels have become part of the township culture.
• The hunger to learn, save and participate in the financial markets is already there; A typical example will be the reception that the NEF Asonge share scheme received when it was launched specifically to empower black communities and to encourage savings amongst them. The shares offered were over subscribed by 13%. It is recorded that around 10 000 groups and 150 000 individuals were consulted through the mobile one on one sessions done to promote the initiative.
  

I hope from now you wont take the tea lady lightly, or the man in blue overall suits that you constantly see in early hours when you are rushing for your executive meeting... There is power in the collectives, people are more than eager to learn and they are not as ignorant as we assumed..!

Until the next article...

Yours in Economical Freedom through Financail Education and Entrepreneurship,

Andile Fulane

CEO Empowered Vision
email: empoweredvizion@gmail.com
Cell: 084 770 9270