Q&A with financial literacy champion Palesa Lengolo

10 February 2020 - 14:59 By Carla Lever

Nal'ibali Column 4: Term 1, 2020

Congratulations on your new book, Stokvels! Why have stokvels historically been so important in South Africa?

Stokvels are a proudly South African way to save. This collective investment is one of the strategies families in SA use to generate income, as a result of the high rate of unemployment in the country.

The ‘income’ from stokvels is used by members to source food, fund burials and sustain their families. And it signifies ubuntu - a spirit that ignites people to work together for the benefit of all.

Many people think that stokvels are a minor form of investment, but you bust that myth. Are we telling the wrong story about the power of collective action in SA?

We definitely are! The industry is estimated to be worth R49bn – it’s no minor force.

What inspired you to challenge outdated South African stories around financial advice?

I wanted to change so many perceptions that are out there about stokvels, but most importantly to financially educate stokvel members, individuals who have never thought of joining one and people just wanting to improve their financial literacy.

We often talk about literacy in terms of reading and writing, but financial literacy is just as important. What's your assessment of South Africa's average financial literacy?

Financial literacy is the ability to understand financial concepts and make informed financial decisions. On average only about 41% of South Africans are financially literate. According to the 2019  South African Labour and Development Research, South Africa’s extremely high levels of income and wealth inequality mean that financial literacy may become a central policy concern, just like reading literacy.

How can we improve this form of literacy, starting from a young age?

Part of building a successful society is nurturing healthy money habits from a young age. Teaching kids about the value of money and how it works through telling the right stories is very important. It also means parents themselves need to be financially literate. The integration of financial education into the formal school curriculum should be accelerated, while at the same time many more adult financial literacy programmes should be rolled out.

Financial literacy is the responsibility of everyone - including parents, schools, the government and the private sector. If all these work together, starting from a young age to adulthood, this form of literacy would drastically improve.

Is there generational gap in how people manage their money in South Africa?

Stokvels are becoming popular among most age groups - unlike long ago, when they were used only by "old" people. In the book I mention the research done by African Response indicating that stokvel members predominantly fall between the ages of 25 and 49 (78.2% of them), as well as Old Mutual’s survey showing that the number of youth (aged 18 to 30) using informal savings has increased. So stokvels are not for only the old or the young: all ages participate in these collective groups.

What kinds of information can readers of all ages expect to find in your book?

Financial education; viable opportunities and investments that groups or individuals can take to make their money work; real-life stories of how stokvels impact people’s lives; advice from experts; why stokvels will stay relevant; and of course the not-so-good side of stokvels: scams, how to spot and avoid them. Basically this book provides helpful financial information for ordinary people.

Stokvels often seem risky to people afraid of losing control of their money. How can people minimise risk?

Do it right and legally from the start. Genuine stokvels have their constitution and a bank account in the stokvel’s name, use registered financial service providers and have good admin in place for transparency - for example using StokFella app.

Are there any freely accessible online resources you can recommend for people wanting to brush up on their basic financial knowledge?

Yes there are. One needs to be curious enough about financial concepts to start searching online. Check sites like Investopedia and JustOneLap, as well as YouTube and social media to follow finance people/accounts that share financial knowledge. To take your financial knowledge up a notch, you have to be prepared to pay for books to read - like mine!

What are some of the most inspiring stories you encountered while researching?

I came across very inspiring stories of what people have done to use this traditional tool to build wealth. The most memorable was the investment club which turned into a whole investment company. Likewise, a property stokvel grew to become a property business. Countless stokvels also funded projects or small businesses along the way and changed people’s lives.

Stokvels is published by Penguin Random House.


Reading and telling stories with your children is a powerful gift. It builds knowledge, language, imagination and school success! For more information about the Nal’ibali campaign or to access kids' stories in a range of SA languages, visit www.nalibali.org.