“Stokfella has emerged as just the thing for the stokvel schemes in the country. Based on feedback from end-users, central to the app’s success has been digitally-based options that ease the administrative burden of their traditional community-based schemes and offer business-focused investment options and benefits.“
Generations have used community-driven stokvel schemes as a source of funding for unforeseen eventualities like funerals to certain expenses like school fees. Unfortunately, the main challenges is that the traditional structure of stokvels is out of sync with the post-1994 objective to develop avenues through which previously disadvantaged individuals can invest the capital and build wealth.
In view of this, Tshepo Moloi, decided to bring innovations to ensure that stokvels can enable their members to build wealth (invest) over and above their traditional operation. He realised that stokvels required a new view, a digital face and an entrepreneurial spirit to modernise traditional stokvels and began working on an app named Stokfella.
So far, Stokfella has emerged as just the thing for the stokvel schemes in the country. Based on feedback from end-users, central to the app’s success has been digitally-based options that ease the administrative burden of their traditional community-based schemes and offer business-focused investment options and benefits.
Moloi delights in seeing how an idea that he toyed off casually at first then decided to give it a go is set to revolutionalise how stokvels are managed forever. “Stokfella was my first socially-based developmental challenge. My thinking was that although the stokvel concept had been meeting peoples’ needs for years, it could work better,” he reminisces.
“It became obvious that even members of community-based stokvels didn’t realise that they were, in fact, participants in long-term savings schemes. This was particularly the case in burial stokvels. People are content to contribute to these structures for many years, knowing that funds are paid out as members pass away, Moloi affirms.
With his engineering background, Moloi realised that I could build processes around stokvel operations and then, using his banking experience, marry the processes to a financially efficient model. “I believe that stokvels are an industry. Like any industry, they operate at different levels and offer services that are matched to customer needs. I found that about 60% of stokvels are still traditional and focus on burial schemes, buying groceries, consumables and other services and that the rest of the schemes concentrate on savings.”
”The money, instead of being invested for better returns, remains in a basic account. For example, if a scheme on average pays out about R 10 000 a year and has total reserves of R 100 000, this meant that the opportunity to have R 90 000 invested and earning better returns was being lost,” he demonstrates.
So, how does the Stokfella app change all this?
As a digital platform, Stockfella addresses a younger generation of savers (average age about 35 years old) and investors who are comfortable with the stokvel traditions but want to accumulate funds and build future wealth. This group want stokvels to work for them and open up investment opportunities by using accumulated funds from like-minded people to invest, in say, a property where they can benefit from the growth of property values and also through rentals.
By broadening this concept, Stokfella encouraged people to participate as group investors in activities like transport and logistics, buy franchises and even invest in start-ups buying machinery to produce retail products. The one constant of the offering with the stokvel principle is that everyone contributes, and everyone shares the benefits. It is based on this Moloi describes Stokfella as business as wealth-building made simple.
People who have taken advantage of the Stokfella digital offering include existing stokvels who want to stick with the ‘old-way’ but wish to digitise their offerings to streamline administration, improve information flow, and an interactive base for members to communicate with their stokvels.
Others create investment-based stokvels, post them on the site and invite like-minded groups or individuals to join their ventures. Stokfella also assists those who want to start community-based initiatives by helping with structuring governance measures that safeguard investors.
The success of updated, digital stokvels is demonstrated by the 30 000 people who now regularly use the platform and the millions of transactions that have been recorded since the app went live. So far, Stokfella has more than eight million members, the stokvel industry offers boundless opportunities.
“By providing tech-savvy entrepreneurs with a platform for sharing their inspiration with other like-minded developers, we are helping to build a new digitally-aware nation,” Moloi cannot conceal his excitement.
The app went on to win the Best Financial Solution section of the 2020 MTN Business App of the Year Award and is now attracting a new generation of stokvel savers.
