R 12 Billion per annum market, millions of potential clients, everyone wants a peice of it, but no one is prepared to do the dirty work...

As a promise I intend keeping, from my previous article "From Stokvels to Stock Markets" I promised to share so some of the insight I have been exposing my self to regarding these market. And even in Today's article you won't stop falling over your granny's chair as I share some of the lighting and most fascinating facts about this market.

Like the title of my article indicates "No one wants to do the dirty work". And with this phrase I don't intend to point a finger or act as if I'm better than anyone. But sincerely speaking, as I dig deeper into the dark truths and speaking to the relevant people. I realise that it has been some decades now, and everyone has been standing at the site, but no one willing to start digging and even those few who had the little courage to do so never got anywhere because the digging was done in doubt on whether there is really treasure there, and secondly without doing proper architectural work before the mining starts. In that sense, the dark pit was bound to fall on them eventually, and because of the fear and non commitment no one has succeeded so far...

If you are a bit confused about what Am I going on about, read my previous article and you will be in-tune.

Here are some more facts found about this market that I have recently found:

- According to Old Mutual, what is called grey money, which is money circulating outside the formal market has grown to be a R 33 billion industry in about a decade.

- It is said one in three black people belongs to a Stokvel in one way or another

- The main reason why Stokvels were started back in about a century ago was because of lack of access to banking services by poor people in the rural areas, and even after some emigration took place when people left their home lands to work in the cities, the culture of group saving remained intact because they found out that the banks were not as accommodative.

- Amongst the big four banks (ABSA, Standard bank, Nedbank and FNB) no bank can claim a significant stake in the 12 billion industry. This is because these banks have been trying to develop relevant products for the market, but have been missing some few small and what would seem insignificant characters of the market. The most evident being the social capital, and obviously the interest rates that seem ridiculous to a Stokvel member who is used to either 0% or an insignificant percentage on her/ his borrowings from the group compared to around 10 to 25% and above on banking products.

- The Stokvel culture is not about to cease existence even as black people move into the middle class, and certainly because the social economic barriers are still very much evident, as governmental economic empowerment initiatives are only able to reach the few elites and not to the lay man on the street who is likely to be a member of a Stokvel.

- There are high profile Stokvels that contribute R 200 and 20 000 per month. This was observed by a Pretoria University professor who did a research on why do Stokvels still exist in urban areas with most sophisticated individuals who perhaps even receive preferential treatment from bankers.

I think I have said a mouthful for now, but in my next article I will share some more facts about the Stokvel market, what keeps them together and the activities involved...

There's more where that came from, keep in touch...

Andile Fulane

Founder: Empowered Vision

"Economical freedom through Financial education and Entrepreneurship"

Mobile: 084 770 92 70

email: empoweredvizion@gmail.com