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Stokvel groups as a poverty reduction strategy in rural communities : a case of uMlalazi Municipality, KwaZulu-Natal.

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Stokvels are social gatherings formed by a group of people who share the same bond and have the same goal. Generally, these social networks are formed by friends, relatives, neighbours and colleagues with the aim of saving money on a monthly basis in order to sustain a living. The aim of this study is to understand stokvel groups as a poverty reduction strategy in rural communities with a focus on uMlalazi Municipality, KwaZulu-Natal. In this qualitative study, a purposive sampling technique was used to select participants based on their ability to provide rich information. The research participants were selected by means of snowball sampling and the data was gathered using semi-structured interviews in order to understand the lived and spoken experiences of members. The data collected was analyzed according to the objectives of the study and integrated with the Social Capital Theory by Robert Putnam (1993, 2000). The study found that stokvel groups play a significant role in reducing poverty in rural communities. These programs do not only help members save money but they also teach them the importance of budgeting. The majority of the participants were females. They dominated in the savings, burial and high-budget stokvels while men dominated in the investment stokvels. Amongst these groups, it was found that members preferred women as members of their groups. The reason for this is that women feared to be victims of crime as men, especially the youth in the community, are often associated with activities of violence. Furthermore, the findings also revealed that these social gatherings are motivated by more than just financial support. They seek to provide social and emotional support. Trust, reciprocity and Social Capital were identified as the main drivers of a successful stokvel. For sustainable and effective stokvel programs, the study recommends an increase in youth participation, the execution of additional community development projects and policy implementation by government.


Master of Social Science in Development Studies. University of KwaZulu-Natal. Durban, 2017.