Stokvel business power [2006]
- Date : (2006-01-04)
- Author : SAIE
Stokvel business power
Africa has developed its own proud forms of financial stability and strength. The stokvel can be a wonderful way of making ubuntu work in the financial sector.
A stokvel is a way of combining the financial muscle of many people in the community to achieve goals that are difficult for any one person to reach on their own.
Different kinds of Stockvels are as vast as Africa itself and come in many different forms. While the right kind of stokvel can be very helpful to you and your business, the wrong kind can make life difficult for you by putting you under pressure.
How can a stokvel assist your business?
Stokvels can help you in many different ways
Using a stokvel as a savings bank…
If you make regular contributions to a stokvel, you will be putting money aside regularly. If you were not a member of the stokvel you would probably spend the money! This means that you are helped to have the discipline of saving something regularly.
Short term savings for buying stock...
Many small businesses use this type of stokvel to save to buy stock for their businesses. For example a group of seven women in Limpopo province contribute R 20 a day to a stokvel. The Stokvel pays out R 140 to one of the members on each day of the week.
Longer term savings for buying a dream purchase.
Many small businesses dream of getting access to better equipment or machinery. Their week by week earnings are simply too small to be able to buy that “Big item”. Some people can use membership of a stokvel to buy this kind of item. If you are a member of a big stokvel that has many members and big payouts you could wait for your payout turn and use the money for the sewing machine or bakkie that you have been dreaming of. This type of saving will work for you if you are patient and prepared to wait for your turn even if it takes a number of years.
A stokvel as an insurance policy for when things get tough
Many members join stokvels so that they have a web of support when things are difficult. If you are a member of a stokvel and you hit tough times in your business, you may be able to use your good standing and trusted membership of your stokvel to help you by providing a loan to help you out of a difficult spot. If you are not a member of a stokvel, you may have nobody to turn to!
A Stokvel as a Business support club.
A group of keen business people can start a stokvel together to grow business. This group can decide to contribute regular amounts into a pool of funds which are then made available to the members to launch into business activities. The advantage of this method is that you have a team of like minded people who are all interested in the success of your business because their investment money is at stake! Before the team will agree to invest in any one person’s business idea, they will have to be convinced that the business idea is good and can make money! This is a helpful mentoring team that will ask you all the sticky questions before they agree to lend you the money. If you have difficulty in your business you will have a team of mentors around you who will have plenty of advice of how you can fix your business.
Formalising your stokvel
It is now possible to open a bank account as a stokvel. Many banks are now beginning to understand the wisdom of Africa and are trying to craft banking products to meet the needs of stokvels. Go and talk to your local bank about your needs and see if they can help you.
Watch out for stokvels that can trap you.
Stokvels are only helpful if they help you when you need help. You do not need a stokvel that is not able to help you when your circumstances are difficult or worse forces you to borrow money when you do not need it! Some stokvels can become like a ball and chain around your feet! These stokvels are set up to lend out money to each of its members in turn and then expect each member to pay back double after a month. This is fine if you have a rapidly growing business that needs this kind of money and is able to use it to grow fast and pay back the expected double amount with ease. If you do not need the money but are forced to take it when your turn comes up you are going to get into trouble! Sometimes members just take the money and then immediately lend it out to others who are desperate but not members of the stokvel. This can cause huge pressure when the money is not paid back on time and the member has to face the stokvel without being able to make the full repayment.
Using stockvels creatively
As you can see, it is up to you to get involved in the right kind of stokvel for your business. Make sure that the stokvel is serving you and your needs and not being a nightmare that gives you lots of worries and sleepless nights. Get together with a group of friends that have similar needs to you. Meet and discuss your needs and then use the great creativity of Africa to put together your own stokvel with rules and systems that will be best for your businesses.
