That Stokvel You Joined Could Be Costing You—Here’s What to Look Out For

South Africa marks National Savings Month in July. Among the many ways to save, stokvels can play a vital role in helping people pool resources and manage financial pressure. 

According to the National Stokvel Association of South Africa, there are around 800,000 of these community-based, deposit-taking clubs nationwide, with combined assets worth over R50 billion. More than 11 million South Africans take part in at least one stokvel.

While stokvels are popular, it’s important to be aware that not all of them deliver optimal savings value, says Sarah Nicholson, head of customer experience at JustMoney.

Delivering tangible savings benefits is an important consideration. JustMoney’s Money & Me survey revealed that only 9% of South Africans save the recommended 10% or more of their income each month, while 42% need to borrow money before month-end. Only 16% of respondents could cover an unexpected expense of R10,000 without needing assistance or credit.

“A stokvel can establish good money habits and evolve into a powerful savings tool, but only if it’s chosen carefully and aligns with your financial goals and budget,” says Nicholson.

“It’s vital to do your homework before making a commitment.”

Nicholson offers the following tips when you are considering which stokvel to join:

1. Start with your savings goal. Clarify what you are saving for, whether it’s school fees and uniforms, an emergency fund, a holiday, or protection against a major, unexpected cost such as a family funeral. 
2. Be wary of social pressure. Many stokvels are established through friends, family, or community networks, which can create pressure to join. Proper evaluation is required, however, to ensure the stokvel aligns with your personal budget and savings plan rather than family or social expectations. 
3. Check for good governance. A well-run stokvel should have written rules or a constitution, defined leadership such as a chairperson and treasurer, proper record-keeping of contributions and payouts, and regular reporting. 
4. Understand how the stokvel plans to grow your money. Clarify how contributions are collected and stored, and how payouts are structured and timed. Look for predictable contribution patterns, clear rules for missed payments, active member participation, and regular payout cycles. 
5. Check how disputes are handled. Clarify what happens if there are disagreements or if a member wants to exit early. 
6. Ask how new members are vetted. If anyone can join immediately with no screening or approval process, this is a red flag.
7. Find out where savings are kept. Some stokvels are wary of banks and formal institutions, and retain savings in cash, which makes those funds vulnerable to theft or household fires. Check if the stokvel places funds in a savings account. 
8. Check for succession planning. If one person holds all records, banking access, and passwords, what happens should they become ill, relocate, or pass away? A well-run stokvel should not depend entirely on one individual.
9. Ask about account benefits. Several financial institutions compete for unbanked stokvel money. Many offer accounts specifically for stokvels, such as group savings accounts with member benefits. Find out if the stokvel is utilising these. 
10. Beware of scams. Be cautious of stokvels that promise unusually high returns, pressure you to join, or are unwilling to answer questions or provide records.
11. Observe a meeting before joining. Rather than relying on what you’re told, ask to attend a meeting as a guest. Are records presented? Are members encouraged to ask questions? Do people seem comfortable raising concerns?
12. Ask how the stokvel deals with unexpected events. What happens if a member dies, becomes unemployed, or cannot contribute for a few months? The answer will tell you a lot about the group’s preparedness and fairness.
13. Be wary of a celebrity leader. If the stokvel’s reputation rests almost entirely on one charismatic organiser rather than transparent systems and shared accountability, that’s a potential problem.
14. Be realistic about affordability. Some stokvels require high monthly contributions, and people may belong to several stokvels. Either can put unnecessary strain on your budget. Only commit to sustainable stokvel payments that will not impact your basic household budget.

Ultimately, maximising savings through a stokvel depends less on luck and more on intention, clarity, and structure, says Nicholson. 

“When chosen carefully and aligned with specific savings goals, stokvels remain one of South Africa’s most effective and accessible tools. The most successful stokvel members are those who ask informed questions to ensure their chosen structure supports their savings goals and long-term financial wellbeing.”

JustMoney is a South African financial services company providing a range of solutions – from loans to insurance – underpinned by the data and coaching individuals need to make good money choices.

JustMoney believes that money is personal, so its support is too. Customers are more than just a number; they are individuals with unique goals and dreams. From securing a loan or protecting what matters, to finally getting a handle on debt, JustMoney provides a personalised experience powered by insights that fit customers’ lives.