Stokvels are as South African as pap, braai and the vuvuzela. Traditionally, these communal savings groups, which are based on trust and the spirit of ‘ubuntu’, have acted as informal banks for rural and low-income earners. Today’s stokvel sector is worth roughly R50 billion, according to the National Stokvel Association of SA (Nasasa), an industry self-regulatory body. More than 11 million people belong to at least 810 000 stokvel groups on Nasasa’s database.

A 2024 study by research firm Ipsos revealed that this large network of ‘human banks’ still mostly prefers cash, citing ‘a persistent mistrust of traditional banking institutions, fuelled by perceptions of high fees and bureaucratic red tape, such as lengthy account opening procedures, inflexible withdrawal restrictions and hidden charges that erode savings’.

Yet, these perceptions may no longer be current. A handful of SA banks, including Standard Bank, FNB, Nedbank and African Bank, are offering dedicated stokvel accounts that are digital with competitive fees and access to other banking products. Digital accounts allow all members to view account activity, which ensures full transparency and accountability – also making them more convenient and secure than cash-based ledgers.

Take FNB’s digital stokvels platform, for example, which saw total inflows of more than R5.8 billion, with an average annual interest rate of 6.8% earned per customer. The bank further reports that a large number of stokvel members opened entry‑level, low-fee personal banking accounts in 2025.

‘We are seeking to make it easier for stokvels to access and utilise additional investment products by simplifying the process and expanding the range of solutions available to them,’ says Himal Parbhoo, CEO of FNB Cash Investments. ‘Stokvels can invest in longer-term investment options such as unit trusts or exchange-traded funds [ETFs], in addition to traditional vehicles like call accounts, notice deposits and fixed deposits. They can also support and invest in other businesses, gaining a share in those ventures, which is another form of long-term investment.’

According to Parbhoo, the next phase will be to enable stokvels to easily open these investment offerings directly within their stokvel profiles, ensuring that ‘groups can transition from savings-only behaviour to structured, long-term investment practices with minimal friction’.

Technology is building a bridge between traditional and modern stokvels, helping them shift from informality to the formal banking system. Ipsos noted the emergence of ‘a new generation of younger and higher-income members’, while ‘the integration of technology such as WhatsApp was transforming how groups operate’.

‘Tech is a great enabler,’ says Silindile Leseyane, co-founder and chairperson of Sakhisizwe Property Stokvel. She is part of the new generation of young, tech-savvy members who are using stokvels to invest rather than merely save. ‘We just would not have made it this long if we didn’t have strong technology partners and tools that we use, from contribution tracking, distribution of payouts, to member communication, CRM [customer relationship management] platforms and so on,’ she says.

‘Traditional stokvels focus on either short-term savings (such as rotational savings to the members in the group, or funds that are dispersed at a predefined schedule), funeral cover or savings towards groceries and other essentials,’ says Leseyane. ‘We decided to focus on long-term investing, with property being our asset class of choice because it’s easy to understand, tangible and has great wealth creation benefits through income and capital appreciation.’

Sakhisizwe was founded in 2018 and has grown to roughly 300 members. ‘Over the years we have contributed just over R25 million, although some investments we have since exited,’ says Leseyane. ‘The current assets we have invested in now are student accommodation and Airbnb short-term rentals.’

Interestingly, the 2025 Old Mutual Savings and Investment Monitor confirms this generational shift that has started to turn stokvels into communal investment platforms rather than pure savings vehicles. ‘Stokvels are increasingly being used not only for groceries and burials but also as investment vehicles, with younger South Africans pooling funds for property, education and travel,’ says Old Mutual. This fits into its observation that they now form part of the ‘bold action towards financial freedom’ by middle-income earners.

Offerings such as FNB’s digital stokvel, which enables groups to jointly buy properties via home finance stokvels, contribute to long-term wealth building. ‘This is about people buying items that lose value vs those that generate value for them,’ says Parbhoo. ‘Groceries, for example, are spend that leads to consumption, and further value cannot be gained from it. Whereas spending on an asset means there is further income to generate.’

This benefits the broader economy as well. ‘Having more assets that generate income would create an uplift and would mean more can be done as this additional source of income is generated,’ he says. ‘As more can be done with additional income or even future lending against the asset, means the overall wealth can grow. This explains why buying property, which is an asset that generates income for the stokvel, would create long-term wealth. Further to this, stokvels often buy within the community to support people in and around the community, making a significant impact not just on the stokvel members but the community at large.’

For many South Africans, property stokvels offer an entry into property investment because they typically require lower financial contributions and may feel less daunting than facing the banking system alone.

Leseyane explains that her group prefers to collectively contribute to Sakhisizwe over investing in a conventional property portfolio through a bank. ‘Our members have a say in some of the investment decisions that are made. They also feel that they are part of something as opposed to just being a number in a conventional investment,’ she says. ‘We also share knowledge with our members so they are not simply investing but they get to understand the ins and outs of the investment, unlike being a passive investor who just receives a dividend.’

However, passive investing can also be a worthwhile, low-risk solution for stokvels wanting to build a balanced investment portfolio. Nasasa offers, for example, a stokvel savings bond that is backed by National Treasury. ‘With a fixed interest rate of 9% and monthly compounding, this investment not only ensures capital protection but also offers the flexibility to grow your savings over time,’ says the association, describing it as a unique opportunity to invest collectively in infrastructure and services that benefit local communities. Nasasa’s bond has a minimum investment of R1 000 and is linked to Treasury’s retail savings bonds, ensuring the same level of security.

ETFs are another promising investment product for stokvels. Wendy Hlatshwayo, client manager at etfSA, a specialist investment platform provider, says a number of registered stokvels are already using the etfSA investment hub. ‘ETFs are a low-cost and highly liquid investment vehicle,’ she explains. Their low fee structures mean that less of the return is eroded by cost. ‘ETFs generally track indexes, meaning the investor, in this case the stokvel, is immediately diversified over whole markets and not exposed to one share that may do badly,’ says Hlatshwayo, pointing to another benefit. ‘ETFs are highly regulated as both collective investment schemes and listed securities, and while the value of the investment may vary depending on markets, the risk to fraud or malmanagement is very low.’

These examples show that SA stokvels are on their way to formalising their collective financial power while still honouring their traditions. As more members become financially educated and strive to take their short-term savings towards long-term investing, they are likely to unlock new opportunities for themselves and their broader communities.

By Silke Colquhoun
Images: iStock