Abstract
Stokvels are self-help initiatives designed to respond to the problems of poverty and income insecurity in communities. Stokvels are thus a form of informal social security. Based on a study of members of stokvels in the Orange Farm community in Johannesburg, South Africa, the article examines the role of stokvels in improving the lives of their members. The results of the study showed that stokvels enable members to meet their basic needs. Stokvels also provide opportunities for members to save and invest and ultimately to accumulate assets. The results also show that stokvels promote the empowerment of women.
Highlights
This article, based on a study that was conducted in Orange Farm community in Johannesburg, South Africa, examines the social and economic benefits of participating in stokvels
Stokvels are very common in South Africa, “no official recognition is given to this vital savings mechanism in official statistics, which contributes to an underestimation of the importance of these organisations both as saving institutions and as mechanisms of poverty alleviation and social advancement” (Verhoef, 2001:262)
Despite the lack of official recognition, stokvels continue to function in post-apartheid South Africa as they provide tremendous socio-economic benefits to society
Summary
This article, based on a study that was conducted in Orange Farm community in Johannesburg, South Africa, examines the social and economic benefits of participating in stokvels. Contemporary South Africa is characterised by extreme poverty, high levels of inequality and unemployment. This forces the poor to rely on self-help communitybased initiatives as part of their survival strategies. Lukhele (1990) observes that a stokvel is an informal group savings scheme in which members voluntarily agree to contribute a fixed amount to a common pool on a regular basis. This could be on a weekly, fortnightly or monthly basis. Despite the lack of official recognition, stokvels continue to function in post-apartheid South Africa as they provide tremendous socio-economic benefits to society
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