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Putting an 'intelligent estimate' on SA stokvels

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Cape Town – Due to their informal nature, stokvels are challenging to quantify, and a Fin24 user suggests a method to get approximate figures.

In a recent report South African savings experts encouraged citizens to develop the habit of saving as a weapon against uncontrolled national debt.

At the same time South African Savings Institute (Sasi) chairperson, Prem Govender, questioned the image of South Africans as poor savers.

“Research shows that there’s more than R44bn in stokvels. If people are saving these billions informally, what does that say about our banks and financial institutions?” she asked.

Fin24 user Stephen Japp, who has been involved in the informal savings movement for over 25 years, says community-based group savers, in the form of stokvels and burial societies are mostly unbanked and their savings 'uncountable' because they are outside of formal savings platforms.

Intelligent estimates possible

According to Japp it would, therefore, be difficult to quantify via Deposit Taking Institutions (DTI's) like the National Treasury and Reserve Bank, but intelligent estimates are possible.

“Calculating the quantum of such [savings] at any one point in time, if it's 'informally' managed outside of the usual channels, becomes problematic, however, intelligent estimates can be made by analysing 'what's missing' from the formal economic models, savings ratios, 'notes & coins'  and money supply figures,” Japp wrote.

“We have a fairly accurate count of funds in the system at any one time, whether on deposit or funds flowing through the system on a cash flow basis; a typical model of first world financial architecture.

“If, perhaps, R70bn is 'unaccounted for', this may be a reasonable guideline for estimating such informal savings. That being the case, it seems logical to include such in the broader savings ratio calculations.

“Although, perhaps, not a game changer, it would put our overall behaviour with regard to savings into a more South African specific perspective."

He said we cannot, as an economy, say, "if we can't count it, it doesn't exist".

"Large sections of the population have, obviously, a highly disciplined and strong savings ethic. We should make more effort to understand and to empower it,” Japp said .

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