Stokvels show resilience despite tough economy as savings rise by 42% to R8.3 billion, says FNB
First National Bank's Stokvel savings accounts have proven to benefit those in the entry-level and middle income categories, enabling people to save money and earn interest for their future goals.
FIRST National Bank recently released a statement sharing the importance of Stokvels as a money-saving tool for South Africans who earn an entry-level to middle income.
FNB revealed that its customers’ Stokvel net deposits have increased by 42%.
“Since November 2019, FNB Stokvel customers have continually increased their savings via a Stokvel to surpass the R8.3-billion mark in total member contributions. The growth is a potent indication of the Stokvel members’ financial tenacity in the face of a challenging economic climate,” said FNB in their statement.
Also read: Stokvel safety tips for festive period
“Stokvels remain one of the most popular savings options among many of our customers who earn entry-level to middle income,” said Lytania Johnson, CEO of FNB’s Personal Segment.
“While the make-up of Stokvels continues to evolve, the principles of trust, community and mutual benefit remain the glue in the management and growth of Stokvels. Over the years, we’ve digitised our Stokvel offering to minimise the risks associated with carrying large sums of cash in contributions or cash withdrawals, and this helps FNB-banked Stokvels to easily manage their money without any hassles,” said Johnson.
Sifiso Nkosi, Product Growth head at FNB Retail Cash Investments, said the surge in Stokvel savings comes against the backdrop of a high-interest-rate environment, highlighting the importance of financial discipline among those who use Stokvels to accumulate savings for their goals.
“It’s also important to acknowledge that Stokvels have a profound significance beyond promoting a savings culture, as they facilitate economic participation for individuals and families. In addition, people who save through Stokvels generally have very clear savings goals, whether it is to save for home-related expenses, large purchases or even school fees. As we approach the festive season period, we also urge members of Stokvels to avoid exhausting their savings so they can generate even better returns in the future,” said Nkosi.
Also read: Property stokvels – pros and cons
To help Stokvels better manage their administration, deposits and fund distribution, using its digital channels, FNB introduced a digital Stokvel account with no monthly account fees in 2020.
Stokvels begin receiving interest on the account from one rand. By using the account, Stokvels can purchase funeral insurance for their members and enjoy discounts on the premiums based on how many members of the Stokvel contribute. If a contributing Stokvel member passes away due to accidental death, the funeral cover pays out twice as much.
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