iStokvel: Where do they come from?


Stokvels are an investment instrument born and bred in the township.

The earliest cases of the stokvel-kind of association are from the 1910s in the gold mines of Johannesburg.

The success of the stokvel movement is largely undocumented. It is indeed a story of our history we have yet told. A story of social bonds, intelligent use of money and survival tactics, not so different from the stories of Jews who distinguished themselves as tradespeople under harsh conditions of discrimination in Europe.

The ability of stokvels to be self-generating, even without government support, is a remarkable example of triumph. It should be understood, especially now with the spirit of entitlement that has almost crippled our people’s ability to do things for themselves, that we can do it.

We have the creative potential to innovate.


The term stokvel comes from the English “stock fairs” that were common in the Cape colony in the 1800s, where people had an opportunity to trade livestock for goods.

But the earliest recorded examples of stokvels as we know them today, took place in the gold mines of Johannesburg. Men grouped themselves into magodisana (pay-each-other) clubs, whereby each member contributed money every month.

When a miner was about to go home in the rural areas for holidays, he would be given the whole pool of money. They would all take turns until each member had a chance.

The success of these clubs relied on the honesty of each member, especially the member who was elected to collect the contributions. Usually these clubs revolved around omkhaya (homeboys, homegirls), made up of people who come from the same village or same region of the country.

Another aim of the stokvels was to ensure that members who happened to die while at work in Johannesburg could have their bodies returned to their families back home, so that they could have a dignified burial.

But this was not the only kind of stokvel.

Stokvel Party

The selling of alcohol to Africans in urban areas was very restricted under the apartheid government.

Some people started to get together and then take turns to provide food, drinks and music at different homes once a month. They would charge a small entrance fee to their friends. But the alcohol had to be hidden because the police would come and confiscate it. So some members of the stokvel would dig  holes in the ground where buckets of liquor would be buried, while others watch out for the blue helmets of the policemen.

Other kinds of stokvels that people would do include: Borrowing Stokvels; Grocery Stokvels 

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African Response Survey 2014

From Stokvel to Investments

One of the first prominent stokvels was the called the Zulu Institute, and was formed in 1917. And it was made up of migrant workers in Johannesburg who were from KwaZulu-Natal. The Zulu Institute was pioneering because it was not only concerned with burials.
A. B. Ntuli who was at present at the first meeting, wrote in Ilanga (6th July 1917) about what was agreed:

“no success can come to any people except through co-operation and organization, by means of our own institutions, industries and businesses. This Society is only the first step in our future hope of being one day able to supply all our needs strictly from within our own ranks”

So already by then in 1917, people who were sidelined economically, who were working in the city recognized the need, to build wealth. This wealth would allow them to make a lasting impact by the building of self-owned institutions.

The fact that they even wrote about the forming meeting in the newspaper, means that these people were serious in making their stokvel into an investment vehicle. It was not just thatha ma-chance, they knew what they were doing.

What this early attempt of the Zulu Institute stokvel shows us is that we have a history of making legacies by building wealth.
This should be our motivation today to do the same.

These people back in 1917 were oppressed by segregation, but we are not. So we have even more reason to do even better than them.

By Thokozani N. Mhlambi

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