Author(s): Ishmael Obaeko Iwara, Ogechi Adeola and Vhonani Olive Netshandama
Traditional saving associations are ubiquitous and important to the growth of the informal economy. In Africa, the strength of these savings associations has not been sufficiently harnessed by enterprises in the informal economy, despite them providing opportunities for investment, social cohesion and livelihood made available to the members of these savings groups. Among the successful traditional savings associations in Africa is the Rotative Stokvel Enterprise in South Africa. Often, researchers focus on the impacts, practices, and challenges of the enterprise with little or no attention to how each group is formed and operated. In this study, we argued that interrogating the processes involved in setting up a successful traditional stokvel will contribute significantly to its standardization and increase the opportunities available, through their operations, for entrepreneurs in the informal economy. This will also provide a solid base for its integration into the contemporary space for adaption and practice, regardless of the society. A qualitative research method was harnessed for the enquiry. The use of snowball sampling technique enabled the selection of 47 stokvel leaders from seven villages in South Africa for in-depth interviews anchored on their lived experiences. The data collection was guided by semi-structured questions administered during face-to-face interviews, while the analysis was performed using the thematic method. The enquiry gave insight into the typology of traditional rotative stokvels commonly practiced in the study area, the formation process, operational plan, financial management, and disciplinary measures. It is, therefore, recommended that the steps should be tested to inform a traditional African-based informal rotative Stokvel model that will provide finance, reduce poverty and enhance sustainable entrepreneurial growth in Africa.