The Essential Role of Stokvels and Revolving Clubs in Finance and Insurance in Africa

Lindiwe Ngcobo () and Athenia Bongani Sibindi ()
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Lindiwe Ngcobo: University of South Africa
Athenia Bongani Sibindi: University of South Africa

A chapter in Sustainable Finance and Insurance in Africa, 2025, pp 105-131 from Springer

Abstract: Abstract This chapter examines the vital role of stokvels and revolving clubs in the context of Africa, mainly focusing on their significance in South Africa’s financial and insurance landscape. As informal savings and credit associations, Stokvels foster community financial cohesion by enabling members to regularly contribute to a communal fund. This practice enhances individual financial capabilities and strengthens social connections, aligning with Sustainable Development Goal 1 (No Poverty). Stokvels help alleviate poverty and enhance economic resilience among marginalised groups by providing essential funding solutions and promoting saving habits. Moreover, these systems serve as informal insurance mechanisms, offering community support for significant life events, thus contributing to Goal 3 (Good Health and Well-being). The governance structures of stokvels promote operational efficiency and accountability, ensuring they address their members’ diverse needs, which is crucial for achieving Goal 10 (Reduced Inequalities). This chapter also outlines the historical evolution of stokvels from traditional communal practices to modern financial networks and highlights their growing importance in supporting economic activity in line with Goal 8 (Decent Work and Economic Growth). By examining the intersection of stokvels with these global goals, the chapter underscores the importance of integrating informal financial systems into broader development strategies, promoting sustainable community development and enhancing overall financial resilience. Ultimately, the insights provided are essential for informing policies that strengthen collaborative financial networks, thereby contributing to the Sustainable Development Goals in Africa.

Keywords: Origins of stokvels; Benefits of stokvels; Sustainability; Grocery club; Burial society; Impact of stokvels; South Africa (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:aaechp:978-3-031-86516-9_7

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DOI: 10.1007/978-3-031-86516-9_7

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