• More than 11 million South Africans are members of stokvels.
  • South Africans save a total of R44 billion a year in stokvels.
  • Put together, stokvels are worth more than some of South Africa’s largest businesses, like Pick n Pay, Truworths, and Netcare.


The South African economy has a secret weapon in stokvels that, if harnessed correctly, could bolster the economy and create businesses, new research shows.

The pooled money in stokvels is truly mindblowing: some R44 billion is collectively saved in 820,000 stokvels in South Africa. That means that together, the members of these savings vehicles could buy a number of South Africa’s biggest companies in cash — including Pick n Pay, which has a market value of R33 billion; Truworths, valued at R43 billion; or Netcare, valued at R38 billion. 

The cash flowing through these stokvels easily tops the annual cashflow of most of the biggest companies in South Africa, including FirstRand and Vodacom.

According to research by the National Stokvel Association of South Africa, some 11.4 million South Africans are members of stokvels. Together they would form the second largest province in the country.

The word stokvel derives from "stock fair." In the 19th century British settlers would buy cattle at stock fairs where participants rotated the management of the auctions. In the same way, groups of South Africans pool savings and take turns receiving a fixed amount on a regular basis. 

Today, the money is generally used on food, Christmas shopping, clothes, household goods, school fees, holiday travel expenses and debt. Banks have also caught up with the hype.But now, stokvels aren't only saving vehicles — they create wealth, Rudzani Mulaudzi, an advisor at SVCapital, told Business Insider South Africa. He recently published new research on stokvels as part of a thesis for the University of Cape Town Graduate School of Business. 

This is primarily happening among young urbanites and professionals. They use stokvels to buy shares on the JSE and hold themselves accountable with their money. “For many young people simply putting money in the bank is no longer enough," Mulaudzi said. "They are coming together as a group of five or more, discussing finances and exchanging money that goes to a need planned out well in advance.”

But the real magic happens when stokvels, known as susus, invest directly in small businesses, which is happening in countries like Ghana, Nigeria and Kenya. Currently, the majority of small business enterprises in South Africa are in townships and rural areas and don’t qualify for financing from banks.

While almost completely unregulated, stokvels could provide a strong and stable source of financing for entrepreneurs.

“As black people, the stokvel allows us to flex our muscles. It is just a matter of knowing how to make it sustainable,” says Mulaudzi. 

Stokvel are built on trust and personal relationships. Stokvel defaults (when people don’t pay their part) are the equivalent of 2% of the total amount value of money saved. By comparison, Capitec clients representing 6% of its loans have fallen behind on payments.