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The Meaning Behind the Traditional South African Stokvel

The Meaning of The Traditional South African Stokvel

The stokvel is a traditional South African savings and investment scheme that has been around for centuries.

But what does stokvel mean?

Stokvel is an Afrikaans word derived from the Dutch “stoc,” which means “stock” or “collection,” and “vlei,” meaning “pond” or “pool.” Put together, stokvel literally translates to a collection of stock or pool of funds—which makes perfect sense considering its purpose.

Stokvels are essentially voluntary associations in which members make regular contributions to a pool of funds, to be used as capital for investments, collective activities like parties, and even emergency instances where unexpected costs arise. And in the case of LayUp’s involvement, purchasing big-ticket items from our many partners and suppliers.

So if you’re looking to save money with friends, plan for what could be a very useful cash injection if needed, and even have a bit of fun along the way, the stokvel could be just what you need.

Let’s unpack the concept and nature of the South African stokvel, to determine if it’s the right investment for you.

What does stokvel mean in South Africa?

In South Africa, a stokvel is a member-owned savings and credit association, traditionally used to save money or pool funds for use by the members in specific ways.

Here are just some of the main characteristics and features of a typical stokvel:


Stokvels are community based and often operate on a rotation basis whereby each member takes their turn at receiving the pooled funds.


Stokvels also provide an alternative form of credit and can help members build their credit rating.

A South African staple

Stokvels are a vital part of South African culture, with some traditional stokvels having been around for generations.

Financial safety

Stokvels offer individuals access to finance that they would otherwise not have, creating an important financial safety net.

A source of income for many

Stokvels are also an important part of the local economy, providing a source of income for those involved.

What is the purpose of a stokvel?

The purpose of a stokvel is to help members grow their own capital, or increase their financial stability and savings. Here’s what a well-run stokvel can potentially give to its members:

  • Stokvel members have access to pooled resources, which is an effective way for them to save money, get access to credit and grow their capital.
  • Stokvels are also an important source of financial support and social cohesion in the communities they serve.
  • Stokvels are an African tradition that have been around for hundreds of years, and continue to make a positive impact in South African communities today. 
  • Stokvels are an important way to promote financial inclusion and help people build a brighter future for themselves and their families.

Why stokvels are good for the South African economy?

Stokvels are traditional collective savings schemes that have been a central part of South African culture for centuries. LayUp’s stokvels operate as members join together to save or invest funds in order to be able to buy what they want without having to part with big amounts from personal savings.

The benefits of stokvels for South Africa’s economy are immense:

Stokvels bring people from diverse backgrounds and income levels together to form a group, allowing them to access financial services which may not be available to them or difficult for them as individuals.

  • Stokvels also provide members with regular savings, which encourages disciplined and responsible spending habits among their members.
  • Stokvels increase the flow of funds within the country’s economy.
  • Stokvels provide members with access to credit facilities.

Overall, Stokvels are an integral part of South Africa’s economy and culture. Stokvels provide members with access to heightened purchasing power which may not be available otherwise, aiding in the promotion of responsible spending habits and driving economic activity in the country.

The role of stokvels in improving people’s lives in SA

In South Africa, stokvels are often associated with a sense of community and shared responsibility.

Stokvels have become increasingly popular in recent years as more South Africans look for ways to save, invest, and generate passive income. Stokvels help members create financial stability by providing access to savings and credit that may not be available through traditional banking services. They are not just a way for members to access money – they also provide a platform for members to support and grow their community.

Stokvels help members build relationships of trust and create new social networks, which can be incredibly beneficial in terms of job opportunities, business advice, and other assistance.

For more on the power of the stokvel, how to join one, and even how to start your own, come to LayUp – we have everything you need.

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