Stokvel savers adopting digital tools

Nedbank insights reveal that collective savings accounts – stokvels – are not only seeing a continued increase in new accounts opened, but also a rapid adoption of digital channels. This is attributed to the shift in banking behaviour during the national lockdown.

Since the Nedbank Stokvel Account was launched in September 2018, more than 4 200 accounts have been opened, and 183 000 lives insured through its innovative funeral cover solution. The most popular types of stokvel are savings stokvels, grocery stokvels and funeral societies.

Females are the best savers, making up 55% of the stokvel account members across the country. Gauteng continues to lead with the largest portion of savers (53%), followed by Limpopo (13%), the Eastern Cape (10%), Free State (8%), Western Cape (6%) and 3% each for Mpumalanga, KwaZulu-Natal, and the Northern Cape.

‘We found that many South Africans who are members of stokvels were not participating in the formal banking system,’ says Sisandile Cikido, Head of Retail Investments at Nedbank. ‘Our stokvel account proved to be a popular vehicle to enable members to continue to save communally as they have always done, but with the added benefits of security, competitive interest rates and new access to no-fee banking.’

Data also shows that this audience perceives formal savings as complex and unattainable with high barriers to entry. Some 77% seniors, 83% adults and 89% young adults put money away in informal savings, and they do not limit their savings to stokvels and clubs. This form of informal group saving is still looking to do more with their money and require bespoke banking solutions that will cater to these various needs.

Since the launch of the USSD (cell-phone) functionality to open a stokvel account in March 2019, Nedbank has received 1 446 applications through this channel, 38% of which were converted to stokvel accounts. With restrictions on movement and gatherings, Covid-19 has prompted stokvel members to adopt digital payment methods.

Electronic funds transfer (EFT) deposits increased by 134% year-on-year, most likely attributed to the growing awareness of the lower cost, convenience, safety, enhanced user experience and overall ease-of-use of going digital. This growing awareness did not happen randomly but was the result of sustained communication to clients about the overall value of these smart channels.

Covid-19 might have limited the bank’s interactions due to requirements associated with social distancing, but it is critical that people still save the little that they can, says Cikido. The pandemic has been a challenge for stokvels wanting to bank their money as most banks do not have digital solutions for this market. Over the last year, Nedbank has seen a significant uptake in the use on the USSD channel for stokvel onboarding, as well as digital deposit capabilities such as deposit-accepting ATMs and EFTs. An end-to-end digital solution is high on Nedbank’s list of priorities,’ says Cikido.  

Nedbank is the market leader in the stokvel product category and the first service provider that enables clients to open an account digitally via the USSD string *120*001#.

Value-added services

  • Clients who use their stokvel pay-out to spend on purchases will not attract any fees if they use a Nedbank Pay-as-you-use Account.
  • Stokvel members with a Nedbank Pay-as-you-use Account transact in and out of their stokvel account at no cost.
  • Transactions from the Pay-as-you-use Account to a stokvel account are instant, offering members significant convenience. Stokvel members can automate their monthly contributions through setting up a debit order via the Nedbank Money app.