“Gooi gooi”, also known as an informal stokvel, sees women around South Africa banding together to extend and accessorise, and in some cases, even buy their own homes
Where do you begin a financial plan to gain equity that will see your house turn into a home? Well, in South Africa, for Bongi Makeba*, it began on a minibus taxi ride to work.
“I travel with these women almost daily for about two hours a day for years,” says Makeba from Khayelitsha.
“We speak about our hardships and how on our salaries we will never have a beautiful home.
“This is how our group of women came together to start a stokvel to help us stretch our money and to also be able to make ends meet. We also helped each other a lot during the hard lockdown,” she says.
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From their origins, stokvels – informal savings schemes started more than 100 years ago in South Africa to help people stretch their money in difficult times – have evolved into a credible means of not only building and extending houses but also to buying property.
And it is women who are leading the pack here.
The National Stokvels Association of South Africa says the country’s stokvel economy is estimated at R50bn.
Sifiso Nkosi, Stokvels and Group Savings head at FNB Cash Investments also quotes Nasasa stats saying that at the beginning of 2022, there were around 810 000 active stokvels in South Africa, with a combined total of more than 11 million members.
Generations of “patriarchal attitudes toward women and money have created a culture in which many South African women are either overly dependent on their male partners for their financial wellbeing, or they don’t have the knowledge or means to ensure their own financial well-being”, writes Nkosi.
This, he says, is where stokvels “are helping to change this reality for growing numbers of women in this country, as evidenced by the fact that 60% of stokvel members are female”.
Makeba says she saw how her neighbours were creating better lives for themselves and “I was curious".
“This is how I heard about stokvels extending further than just helping people buy groceries.”
A stokvel is a way of saving by the pooling of financial resources to aid those in a community, traditionally to buy groceries or pay school fees.
“I have been divorced for many years and don’t get any money from my ex which is why I knew I had to find a way to be independent. I earn less than R5 000 a month so financial independence seemed like a distant dream until our ‘gooi gooi’.
“We call it ‘gooi gooi’ which in English is ‘throw throw’ because every month we throw money into the pot.
“There are six of us and we each contribute R1 500 monthly. That way you know that twice a year if it is a stove or fridge you want you will get it with the R9 000 you get. Everyone gets a chance to get that money twice a year.
“We mostly use the money to extend our homes and buy furniture, groceries and stuff. I have a fridge, a bed and a couch from this stokvel and my next step is to build an extra room. However I know some big groups who actually buy property and sell it to make a profit - these are the big stokvels.”
Property stokvels, in particular, are becoming increasingly popular in South Africa as more people realise the benefits of pooling capital to purchase assets.
The Old Mutual Savings and Investment Monitor believes property stokvelling has an “enormous” potential for disruption.
Generally, most stokvel members investing in property use the funds to buy, build, or extend their own homes, but increasingly they are using surplus money to buy affordable property to let for rental income.
Makeba’s group is happy to improve their homes with the cash. “My group and I have been able to beautify our homes through our ‘gooi gooi’ - being unable to access money unless through a loan share - it’s made a big difference to us.”
FNB’s Nkosi adds: “Irrespective of the gender make-up of any stokvel though these robust and proven community savings structures have the potential to help women achieve financial resilience and transform their lives and futures.”
A WORD OF CAUTION:
Property stokvels are not part of the formal business sector and are not regulated in South Africa, so prospective members need to do the necessary due diligence before joining a stokvel, such as formulating their own constitutions that will deal with the rules, regulations, membership information, duties and responsibilities of each member, goals of the property stokvel, and what should happen when a member leaves or is unable to keep up with their financial obligations.
* Not her real name
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