Johannesburg - Fano Ephraim Mtshali hasn't held a steady job since 1998 and claws out a living for himself, his two children and his eight orphaned nieces and nephews by growing vegetables.
But Mtshali, 59, isn't cutting back on his monthly contribution of about R50 - the cost of a Christmas ham - to a savings club he started with fellow villagers in South Africa's Zulu heartland.
"Even if there are economic problems in the country, I can't give up" on the club, he said
The clubs, known as stokvels, have worked for generations in South African villages and townships. Each neighbour contributes a small sum and can draw loans from the pot - often kept in a member's home instead of a bank - for necessities like school uniforms or emergencies like a doctor's visit.
The simple, age-old formula is facing new pressures at a time of rising food prices and an international financial meltdown. But stokvel advocates say they have been remarkably resilient.
"The poor are very capable of managing their own funds and finances very effectively," said Anton Krone, who runs SaveAct, a development group that helps stokvels work out savings, lending and security strategies.
Gaining credibility
Grietjie Verhoef, a University of Johannesburg historian who has studied stokvels, said because members have lived and worked together for years, they are diligent about meeting obligations to one another.
When times are hard and they struggle to keep jobs or get formal financial institutions, their stokvel seems even more important.
"Under a downturn situation like now, these organisations actually gain credibility," Verhoef said. "People say, 'I'm saving with my friends and I can rely on my friends if calamity comes."'
In early December, Mtshali's neighbours politely left their shoes at his muddy threshold and walked across the cool green tiles of his front room to gather at a lace-covered table. They chatted while he pulled a blue metal box from a bedroom cupboard, sang a hymn, said a prayer and got down to business.
First, the bookkeeping. Everyone watched as bills and coins were drawn from the box and counted into a dinner plate. When one woman was given the wrong change after repaying a loan, several laughing voices corrected the treasurer.
Nqe Dlamini, a development worker acting as a consultant to SaveAct, said everyone in the group should know the total holdings as well as their own credits and debits, so records can be reconstituted if they are lost to fire or other disaster. There's no computer backup.
Christmas payout
It takes 30 minutes to drive to the nearest bank, most of the route over twisting dirt road. None of the stokvel members has a car, so doing business with the bank means paying less. The nearest police station is just as far away as the bank.
While Nhlazuka may look pastoral, its villagers aren't naive. "There's crime in every community," said Sibongile Nzuza, a SaveAct community worker.
Mtshali must be present to open the money box in his home. Another stokvel member holds the key to the cabinet, another the key to a chain around the box, and a fourth the key to the box.
Nzuza said a member of another stovkel - a grandmother
affectionately called "Gogo" - talked too widely about where and when cash would be distributed to members. So after she got her share that year, "They said, 'Gogo, we're not taking you back."'
Stokvels traditionally dissolve at the end of the year, in time for Christmas shopping. In what is known as a payout, members get their savings, plus a share of any interest earned. Mtshali's stokvel charged 10% interest on loans, and many of its 13 members ended up with a small profit.
Verhoef, the historian, said records show the first stokvels were formed at the end of the 19th century along South Africa's southeastern coast. The members were Africans who worked at scattered farms owned by European settlers. They got together at annual cattle shows, and the name stokvel comes from stock fair.
In South African cities today, middle and high-income blacks are forming investment clubs based on the stokvel model that buy real estate or stocks. But for the most part, stokvels remain havens for the poor, dominated by women and resistant to innovation.
Small profit
"These organisations don't have to change," Verhoef said. "That's the way they survive."
Mtshali, the only man in his stokvel, failed to persuade members to put off this year's distributions and try to start a nest egg for opening a business. The women stuck with tradition, paying out an average of R450 each in savings, plus about R120 each in interest.
Flora Mkhize, the group's 56-year-old secretary, contributed to the stokvel from her government pension and said she would use her payout to help buy school uniforms for her grandchildren. Philisiwe Ndlovu, an 18-year-old high school student whose mother sent her money every month to save, also planned to buy school supplies - and a new dress for
Christmas.
Ndlovu spoke proudly of having learned to economise, plan and work with elders in her village to decide on loans and police their repayment.
"And at the end," she said, there was "the good news of getting your investment back."
- Sapa