FNB stokvel net deposits surge 15% surpassing R9.6bn mark in member contributions over the past year
|Published
Stokvels continued to demonstrate South Africans tenacity and commitment to saving despite the prevailing tough economic environment, FNB says.
This as the bank saw a 15% increase in net deposits, surpassing the R9.6 billion mark in total member contributions at over the past year, it said in a statement yesterday.
Himal Parbhoo, the CEO of FNB Retail Cash Investments said, “Being a member of a stokvel is one of the most popular ways for South Africans to develop a savings culture. However, the challenge has always been in ensuring that the stokvel savings are managed efficiently while yielding the desired outcome to meet the stokvel groups’ goals.”
A stokvel is a type of credit union in which a group of people enter into an agreement to contribute a fixed amount of money to a common pool weekly.
And in South Africa stokvels are a more than R45 billion industry with over 800 000 estimated different groups.
FNB said it has seen positive adoption on its digital solutions over the years, with over R4.7 billion payments and withdrawals year-on-year performed on its digital platforms.
The bank added it continued to digitise its stokvel offering to help customers save in withdrawal fees and minimise risks associated with large sums of cash in withdrawal and contributions. This had helped its customers manage their contributions and money better.
Cebile Magongo, a Growth Specialist at FNB Retail Cash Investments, said stokvels had been instrumental in promoting a culture of saving and assisting individuals and groups to reach their financial goals.
“Stokvels are growing and changing despite the difficult economic environment because they are being used for reasons other than those for which they were originally designed.”
Magongo said they were seeing a trend of stokvel groups looking at various investments such as investing in shares, unit trusts, exchanged trades funds (ETFs), buying franchise businesses and other vehicles to generate wealth for the future generations.
For this reason, the growth specialist said it was becoming more important for financial institutions to improve their processes to help simplify the administration processes for members to allow them to explore opportunities, diversify and grow their portfolios.
Magongo said instead of withdrawing all funds for short-term goals, they encourages stokvels to consider diversifying their portfolios using a wide variety of investment vehicles that could yield returns that surpass inflation and could go a long way in bringing higher returns and growing combined wealth for individuals and families.
BUSINESS REPORT