Safer community saving with locally designed stokvel app


Yethu is a new locally developed app that helps make community stokvel saving safer and easier.

saving money
Stokvel informal saving systems involve communities pooling money to empower them with greater purchasing power, for the greater good of the community. (Image: Pixabay CC0 Public Domain)

CD Anderson

Yethu, a new mobile app designed to make community stokvel saving more secure and more transparent, has been created by a group of young innovators, community leaders and mobile banking experts.

What are stokvels?

Stokvels are invitation only clubs of twelve of more people serving as rotating credit unions or saving scheme in South Africa where members contribute fixed sums of money to a central fund on a weekly, fortnightly or monthly basis. Monies collected are often used for funerals, community celebrations, to finance education for young people, or even for group investment schemes.

Historically, stokvels were created by low-income communities that were often excluded from traditional banking systems. Stokvels are still very much a way of life for many rural  and township communities  across South Africa which have limited access to banking services..

Andile Mazwai, the chief executive of the National Association of Stokvels of South Africa (Nassa), reported in 2016 that there are approximately 11.5 million individuals who participate in stokvels with an estimate R45 billion collected in any given year, and that is typically the same amount of money which is saved in any given year.

That’s what the Yethu app aims to solve.

Based on an idea by Tuskan Owen-Thomas and Sebastian Daniels, two business students at the University of Cape Town, the development of the app involved input from mobile banking experts and interface designers, as well as, with community stokvel managers themselves, to create a streamlined, easy-to-use management system.

A unique aspect of the app is that it doesn’t require the latest smartphone technology to use. It is easily adaptable to older or low-priced mobile devices.

Speaking to Huffington Post South Africa, Owen-Thomas emphasised the importance of getting on-the-ground guidance in developing the app:

“We spend a lot of time researching what to do, how it works, getting a lot of feedback. We’re still learning. Meeting with groups and finding out new things. I think there are a lot of people trying to get into the stokvel market, but they are trying it from an ivory tower approach. It’s an ongoing process. We meet new people, find new issues and then mould the product as we go. It’s never really finished.”

Secure, transparent, accountable

Yethu operations manager Nosiphelo Mnyani spoke about the benefits of the app for the community to News24: “Stokvels are completely based on trust and this creates loopholes for fraud and theft. We aim to give stokvel members the security, transparency and accountability which didn’t exist previously.  We also want to give the (stokvel) leader a management tool that allows them to be more accurate, gain more interest and increase their trust.”

Yethu group
Yethu, a diverse group of young community leaders, stokvel specialists, designers and mobile banking experts, has created a community saving app that is safe, secure and easy to use. (Image: Yethu website)

Mismanagement and fraud as a result of lack of information defeats the spirit of the stokvels, says Daniels, adding that Yethu aims to “improve the financial education of the members so that they are well informed of the potential risks the current arrangements have, and also presenting them with an alternative which they can use to continue keeping their funds in the stokvels, but more securely”.

The app was launched in 2016 at a presentation to stokvel groups in Khayelitsha, Cape Town. The Yethu group, supported by the Allan Gray investment firm, is visiting communities around the country, demonstrating the app’s ease-of-use and peace of mind. And, so far, reaction has been positive.

Daniels outlined the road ahead: “Our (current) goal is to get between 10-20 stokvel groups (roughly 150-300 people altogether) on the system to really get it strong.” While working out the kinks in the app, with assistance from users, Yethu hopes to build up to 1,000 groups on the system by the end of the year.

In response to the Yethu app, Nassa has welcomed any move to effectively secure and manage the funds of its members. It hopes that a more secure saving system will give stokvel communities more confidence in long-term investments that will benefit communities.

For more information on the Yethu app, visit the group’s website.

Source: News24, Huffington Post South Africa, Yethu website

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