Beyond the Piggy Bank:
Why Stokvels still power South African communities
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Audio Title: Beyond the Piggy Bank: Why Stokvels still power South African communities
Description: In South Africa, the stokvel is a cultural institution. For decades, these savings clubs have helped families pay school fees, buy homes, and weather hard times. But as the economy shifts and financial technology evolves, stokvels are facing new pressures — and new opportunities.
In South Africa, the stokvel is a cultural institution.
For decades, these savings clubs have helped families pay school fees, buy homes, and weather hard times.
But as the economy shifts and financial technology evolves, stokvels are facing new pressures — and new opportunities.
Lebohang Manyana, CEO of MyCircle, knows both sides of the story. She’s been part of traditional stokvels that changed her life, and she’s seen firsthand where the model falls short.
“The beautiful thing about stokvel… is how I actually moved here. It was 15K. It was my month. And I was able to move here because of it,” she recalls.
The Rules of the Game
At its simplest, a stokvel is a group of people pooling money and paying it out to members in rotation.
“Traditional stokvel, it is a minimum of 12 members and you have to sign up in January so that each person gets a chance to contribute and to get a payout,” Lebohang explains. “We come together, draft a constitution — are we going to be based on property, grocery, savings, whatever — and then we agree on the amount. Is it going to be.”
Each month, one member gets the lump sum, while everyone continues contributing until the cycle is complete. Nobody makes a profit, but everyone benefits from timing, discipline, and trust.
Step-by-step, it works like this:
- six people contribute R10 each month. That creates a pot of R60.
- One member takes it in January, another in February, and so on.
- By the end of six months, everyone has paid in R60 and received R60. Nobody’s money “grows” — but those who get paid out early enjoy what is essentially an interest-free loan.
Why It Works
The attraction is straightforward: stokvels offer financial access and social accountability in a country where both can be scarce.
“They really do help,” says Lebohang. “If you want to pay off your house, for example, and in a bigger-tier stokvel, it helps you to pay off your house. If you perhaps wanted to purchase a car, but didn’t have a deposit, it helps with that.”
“Community wealth. That’s the beautiful thing about stokvel.”
– Lebohang Manyana
Stokvels also build more than savings accounts — they build trust. Members are often family, friends, colleagues or neighbours. For many, the sense of belonging is as valuable as the cash.
The Growing Pains
But stokvels are not without their flaws. For Lebohang, the biggest frustration was the lack of growth.
“There’s always one member of the group that doesn’t want to grow. That’s comfortable with the 3K we contribute. And yet it’s like, no, but how are we going to get to 100K if we’re just contributing 3K?” she says. “Imagine one company being stagnant for five years. It doesn’t make any sense.”
Other challenges include human error, poor record-keeping, and sometimes outright dishonesty. “You’re human. You’re going to make a mistake… maybe we even have a bad person who’s like, ‘I’m going to keep this 3K for myself.’”
Banks, meanwhile, have tried to capture the stokvel market with special products. But Lebohang is sceptical. “They pretend to. They’ve got advertising that they do. But in reality, there’s so much red tape, and it’s not as transparent as it is when they advertise it.”
Reinventing the Model
That’s where fintech steps in. MyCircle, Lebohang’s platform, aims to digitise the stokvel experience using blockchain.
“If a customer asks me, how are you different… It’s blockchain. There’s absolutely nothing I can even do as a CEO to change anything. It’s a digital footprint.”
– Lebohang Manyana
By offering multiple tiers and greater flexibility, MyCircle is designed to give members the freedom that traditional stokvels often lack.
Not Just an “African Thing”
Despite their deep roots in South Africa, stokvels are not unique to the continent. Similar systems exist in Japan, the Caribbean, and other parts of the world.
“A lot of people are like, no, that’s an African thing,” says Lebohang. “And it’s like, no, it’s not. This is in Japan. In the UK they have community contributions… It’s just not called a stokvel.”
The stokvel’s power lies not in multiplying money, but in reshaping access to it.
Whether paying for groceries or building property empires, these clubs show how communities can achieve what individuals cannot.
For Lebohang, the challenge now is modernising without losing the human touch.
Teagan specialises in Copywriting, Public Relations, Social Media Marketing and Blogging. Teagan uncovers the deeper “why” behind every venture. She believes that every person and project has a unique story, and nothing excites her more than transforming these narratives into compelling content that demands to be shared with the world.
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