Success Factors and Gender Participation of Stokvels in South Africa

Despite the large sum of money circulating in stokvels every year, informal saving schemes are not given enough attention by the formal sector in South Africa. The objective of this study was, therefore, to determine the success factors of stokvels and to find out whether gender is a factor in members of stokvel participation in South Africa. Prior studies have generally focused on mobilization of savings through stokvels while none have paid particular attention to the success factors and gender participation in stokvel. This study attempts to fill this gap by using a self-administered research questionnaire on a sample of 386 respondents. Members of stokvels were surveyed from the cities of Pretoria and Johannesburg in the Gauteng province of South Africa. Data was analysed using descriptive statistics, exploratory factor and correlation analyses. Using descriptive and correlation analyses, the study found that more females than males participated in stokvels. Finally, the majority respondents were either single (42%) or married (29%). The rest were engaged,widowed and divorced. The young to middle age groups (21-50). Respondents were generally educated up to least matric level of education. Only 18% did not attend school at all. Stokvels succeed due to their informal nature, which is characterised by a lack of lengthy and stringent formalities and low transaction costs when compared to formal financial institutions. Constructs were found to be positively and significantly correlated at 1% level of significance (2-tailed). The results of this study have policy implications for financial institutions in South Africa.