JULY NATIONAL SAVINGS MONTH OF

SOUTH AFRICA 2014

FOCUS ON THE INFORMAL SECTOR

Theme: “my savings, my future: time to build”

6/10/2014

1

JULY NATIONAL SAVINGS MONTH OF SOUTH AFRICA 2014

1. INTRODUCTION

Stokvels, Mogodisan, Lekgotla, are synonymous with Township Savings and

Investment Clubs. As South Africa’s savings rate remains low, it is even

lower at household level. As many South Africans remain outside the job

market, and others overly indebted, the challenge to put aside something for

a rainy day grows even bigger for ordinary citizens. Inevitably the formal

financial sector is likely to lose its clientele, as individuals turn to the

informal sector for social capital. The burgeoning research within the country

reveals that stokvels are enjoying substantial membership, and that they

continue to play a financial support role in the lives of many South Africans.

Indeed recent research findings point to forward looking stokvel structures

that encourage members to save/invest in education for their children or to

purchase or expand homes, over and above saving for basic day-to-day

requirements of food and medical care. For many years, these types of

schemes have been the investment options for men and women in the African

communities, and they are unwavering in this regard.

The outcome of the SASI Savings Symposium of 2013 pointed to a financial

regulatory framework that is inadvertently keeping many South Africans out

of the operations of the formal financial system. As practitioners strive to

observe the current regulations, ordinary South Africans have only two

options of either joining the seemingly unaffordable/inappropriate system for

their needs, or run to their well acquainted informal system, even though in

the end it could harm them by taking advantage of their lack of alternative

financial service/product options. This problem is exacerbated by the

fragmentation of this market, which makes information sharing on financial

risks and opportunities almost impossible.

6/10/2014

2

In lieu of the above, the South African Savings Institute has decided to focus

specially on stokvels during this year’s July National Savings Month. Under

the theme, “stimulating local economies”, SASI will host a STOKVEL

EXPO as the flagship event for Savings Month 2014. The objectives of the

Stokvel Expo are:

i) To link Stokvel Groups/Associations with the formal financial

institutions that could service them

ii) To gain an in-depth understanding of the various stokvel models

iii) To investigate the implications of stokvel activities to overall

household savings

2. MOTIVATION FOR THE STOKVEL EXPO

The exclusion of many South Africans from the mainstream financial sector

during apartheid, had the unintended consequence of the emergence of

parallel informal financial mechanisms. After 20 years of democracy as well

as financial sector reforms that encourage access to financial services, these

informal mechanisms are still vibrant, with membership that spans across

the entire income spectrum, which has implications for the formal financial

sector. The most comprehensive study by Africa Response (2012) put a value

of R44billion per year of savings accumulated through this mechanism.

Unfortunately, it remains a challenge to pin down the value-added by these

funds to the formal financial sector and the broader economy.

As an advocate for inculcating a culture of savings in the country, the

Institute chose July to be dedicated to this cause. July has now been declared

National Savings month, during which stock is taken of the savings

landscape with outputs which inform policy debates on savings and

investment, assist practitioners showcase their innovations regarding tailor-

6/10/2014

3

made services and products, etc. July National Savings Month has the

following objectives:

1. To promote debate around key aspects of savings;

2. To raise awareness of the benefits of short, medium and long

term planning;

3. To build relationships with key partners to leverage future

opportunities;

4. To foster a culture of saving within a local and international

context;

5. To complement the messaging being generated through the

social security and retirement reform process;

6. To make it meaningful and relevant to the youth and

entrepreneurs.

The Stokvel Expo is therefore in line with the goal and objectives of Savings

Month and of the Institute in general.

3. INTENDED TARGET AUDIENCE

The Stokvel Expo is targeted towards government, regulators, financial

services providers from the formal and informal sectors, stokvel

members/groups and civil society. Up to 5000 guests are expected to visit the

expo during the period 03 – 06 July 2014.

6/10/2014

4

4. ACTIVITY SCHEDULE FOR JULY SAVINGS MONTH

CAMPAIGN

It is our hope that the Expo will provide a platform for engaging with the

informal sector, to allow formal practitioners to get an opportunity of

profiling these potential clients and thus getting an insight into how to best

serve them. By bringing together these groups of stakeholders, we believe

that this will be a step in understanding how this sector of our economy

operates, how big it is and thus enable policy makers to include them in the

policy review process especially for policies related to financial inclusion.

Period Activity Venue

30 June

2014

Savings Month Feature in the Independent

Newspapers

National Print Media

03 July

2014

Breakfast launch of Savings Month 2014

Unveiling of the Stokvel Expo

IDC Auditorium,

Sandtom

03 – 06

July

2014

Stokvel Expo 2014 featuring:

Showcase of services and products for stokvel

groups/associations as well as for the lower

LSMs 1-5

Onsite Financial Education workshops

Tshwane Events

Centre, 155 Soutter

Street, Pretoria

07 –31

July

2014

Media campaign:

Mainstream and Community audio and print

media

Interactive website blogs

Tailored financial literacy workshops

Communities, Varsities, Schools, Employees

Financial Clinics featuring qualified voluntary

financial planners offering free financial advice to

consumers

Country-wide

6/10/2014

5

SASI PROFILE

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The South African Savings Institute (SASI) was founded by the Industrial

Development Corporation and Ipac which is now known as Acsis, in 2001.

SASI is an independent non-profit organisation dedicated to the development

and delivery of programmes that encourage growth in the level and rate of

saving among South Africans. The Institute is governed by an Advisory

Board selected from strategic financial sector institutions, and a Secretariat

that operates under the supervision of the Chief Executive Officer. To execute

its mandate, SASI works in partnership with policy makers, regulators,

consumer educators, civil society and the academia/research houses.

For more details please contact:

Elizabeth Lwanga-Nanziri

Chief Executive Officer

South African Savings Institute (SASI)

Tel: +27 11 269 3789 | Mobile: +27 79 352 1770

Email: elizabeth@savingsinstitute.co.za