A stokvel, in simple terms, is a savings club. It’s made up of a group of people pooling money together for a common purpose. Mukando or stokvel initially started among the poorer communities who pooled their money together, but has grown to include higher income earners. In South Africa, the stokvel has a slightly different origin than in Zimbabwe.

Stokvels are a R49 billion industry, according to Fin24, with over 11 million locals participating in approximately 800 000 stokvels (Sanlam). Stokvels in South Africa are gaining momentum, with formal institutions like banks, scrambling to offer supportive packages for these savings clubs. The statistics for the Zimbabwean landscape are not as readily available, but companies such as Cassava Smartech have supportive packages. The Ecocash mobile money platform offers an option to start an Ecocash Saving Club.

Mukando at the informal level

On a less formal level, Zimbabweans have been forming savings clubs for years now. A group of people, sometimes as few as four, commit to contributing a specified amount of money to the group. The money is given or sent to a member of the club, with members rotating each month. Each savings club has an objective and sets the rules for all the members.

Burial societies are a classic and popular form of a stokvel or mukando. They are most common among rural communities, churches and lower income earning urban communities. New members can usually benefit three months after joining. These societies are extremely useful because funerals are expensive and bereaved parties are often financially unprepared for the funeral and memorial service costs that follow.

Is it effective?

Formal businesses fear to create services targeted at stokvels because they seem to have no structure, but that is not the case. Stokvels are governed by a constitution that is agreed on by every founding member. Large stokvels like burial societies will have a treasurer, secretary and sometimes group leader. The savings account used would have more than one signatory, with all members enlightened whenever a withdrawal is made.

Savings clubs leverage the power of the collective, with everyone in the club benefiting from it. Stokvels are popular for encouraging a saving culture among its members within the group. Some people claim they find it difficult to save on their own and need the pressure from other group members in the stokvel to save faithfully. The rise in popularity of stokvels in South Africa strongly indicates that these savings clubs are quite effective for the majority of the group members.

We recently covered one Kenyan ladies’ stokvel that built flats to rent out. This is an often-ignored point about stokvels that they need not only be consumption based but can be used as powerful investment vehicles. In fact, the joint stock corporation (company) is in substance a big stokvel focused on investment.

Benefits of joining a stokvel or savings club

One of the reasons stokvels are exceedingly popular is their informality. Savings clubs give you access to interest free capital at no extra cost to you. There are no lengthy forms to be filled in or pesky official documents. For South Africans, the lack of credit checks is also a major benefit of a stokvel. Additionally, everyone in the club stands to gain fairly, and equally from it. Perhaps one of the biggest draws for stokvels is they put the power in the people’s hands, versus the hands of capitalists and other stakeholders who stand to benefit from depositors’ money. Stokvel members have a great deal more say and power within their clubs than they would with established financial institutions.

The downside of stokvels

The stokvel’s biggest strength is also one of its greatest drawbacks, it relies on trust. Members need to be trustworthy and behave likewise for the club to be effective. Sometimes people in rounds complain about a member, who after reaching their turn to receive a lump sum pull out of the club before the turns come to full rotation. In cases where the stokvel is more formalised with a bank account, the signatories have been trusted not to withdraw all the money and use it outside of the group’s agreement.


Joining a savings club can have immense benefits for an individual, and open access to otherwise unavailable sums of funds. The stokvel industry in Zimbabwe is nowhere near as massive as South Africa’s for several reasons. One of the more prominent reasons is the lack of faith and trust in banking institutions from Zimbabweans. Stokvels could turn into powerful investment engines in Zimbabwe, but the instability of the financial sector has resulted in the preference towards stocking cash in their homes among citizens.