Thandi Mkhabela’s money used to slip through her fingers.
Now the 34-year-old mother of four earns interest on monthly savings, has paid off debts and is planning to extend her house in a township just outside Johannesburg, without ever dealing with a bank.
Mkhabela’s improved financial footing came after she formed a savings club in June last year with 16 other women. Each of them contribute 100 to 500 rand (US$6.68 to US$33.42) a month, and the club, known as a stokvel, offers three-month loans to members at rate of 10 percent per month. At the end of the year they split
Thandi Mkhabela's money used to slip through her fingers. Now the 34-year-old mother of four earns interest on monthly savings, has paid off debts and is planning to extend her house, without ever dealing with a bank.
Lenders are thought to have access to less than a quarter of a R50bn market, but some stokvel members point to the additional costs and lack of flexibility of a bank account