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Chama Money is bringing stokvels into the digital space

Published on May 5th, 2021

On a mission to make investing simple for everyone, Chama Money offers a seamless digital platform from which to engage with stokvels. Founded by Sibabale Joja and Palesa Lengolo, this startup allows users to pool funds and invest as a group, just as they would with a traditional stokvel, only now, they’re also able to easily keep track of payments and contributions, and keep one another accountable via the digital interface. Powered by a mission to financially empower those in disadvantaged communities, Chama Money is championing financial inclusion through localized solutions.

A few years ago, software developer, Sibabale Joja paid a visit to his aunt. A long-time participant in stokvels (a South African term denoting an informal savings pool to which members regularly contribute), she expressed to him the problems she was experiencing which ranged from issues of security and transaction transparency to the hierarchical nature among stokvel members. Based on this, Joja got to work building a prototype that had the potential to address these complaints, ultimately setting the foundation for what would become Chama Money.

Chama Money has digitized the stokvel process from end to end. Log on to the platform and you’ll be presented with a list of stokvels around the country that you can join. From there, Chama Money will debit your online wallet and automate the weekly or monthly contribution process. They’re also working to bring the concept of stokvels further into the formal investment space. Currently, most stokvels focus on short-term savings, but Joja and his team see an opportunity to provide long-term financial investment education to their customers.

According to UCT Graduate School of Business, there are over 820 000 stokvels operating in the country with a combined membership of approximately 11.4 million people. Despite this, it remains an ignored sector of the economy that few big businesses have considered investing in. In Joja’s view, this is because those with no connection to informal communities are unable to understand the market. “Stokvels are entities that operate on trust… and [participants] often… live in rural areas, townships, or squatter camps, and cannot get proof of address to go through the FICA process,” he explains. But Joja and his team grew up in these communities, and this direct connection—as well as their FinTech expertise—places them in a unique position to implement a digital solution.  

To offer the best possible product, Joja and his team have immersed themselves within the community they aim to serve. Joja has spent the better part of the past year and a half living in the Eastern Cape and asking everyone from grannies in the street to fruit and vegetable vendors about their engagement with stokvels and investments. And Although the COVID-19 pandemic threw a spanner in the works when it came to conducting research at stokvel gatherings; it also inadvertently emphasised the value of the remote nature that Chama Money encourages, as well as of their long term plans to implement features like chatting and video calling.

Big believers in the power of mentorship and education, this team’s experience with the AlphaCode Incubate programme has bolstered their drive to make an impact according to Joja. Further down the line he says, they’re hoping to partner with more major retailers to enable those who don’t have smartphones to deposit money in store and make an investment over the counter. They’re also aiming to eventually become a broker themselves and easily allow customers to buy assets such as individual shares on the JSE.

“I think businesses like ours have a responsibility to impart financial literacy education to the communities we serve. If we want to create a community and indeed a society that is better off, any entity who works in this space needs to make this a priority,” says Joja.