1.Definition:

A Stokvel is a unique financial group where members personally know each other. The group meets regularly in person, and in these changing times, virtually, and only invited individuals can join. Members contribute set amounts for specific benefits.

2.Membership Requirements:

To be part of a Stokvel, individuals must be personally known to existing members. Membership is strictly by invitation to maintain a trustworthy and secure environment.

3.Financial Transparency:

Stokvels must keep clear financial records, documenting contributions, benefits, and spending transparently. All financial transactions should happen through reputable financial institutions.

4.Stokvel Constitution:

Each Stokvel needs a constitution outlining its purpose, rules, and benefit structures. The constitution should be accessible to all members and reviewed periodically to stay relevant.

5.Regular Meetings, Including Virtual Gatherings:

Regular gatherings, both in-person and virtually, are vital for discussing contributions, benefits, and other important matters. Meetings encourage open communication and collective decision-making among members. However, the emphasis should be on maintaining a balance to prevent uncontrollable growth where members no longer know each other personally.

6.Benefit Structure:

Stokvels must clearly define the benefits for which members contribute. These benefits should be explicitly communicated in the Stokvel constitution.

7.Conflict Resolution:

A structured conflict resolution process is in place, considering the close-knit nature of the group. Mediation services are available through the NASASA SRO, and may be activated in the event that internal dispute resolution mechanisms failed to address conflicts.

8.Privacy and Data Protection:

Measures are implemented to protect the privacy of Stokvel members. Clear communication outlines how personal and financial information will be handled and protected, complying with data protection laws.

9.Reporting Mechanism:

A reporting mechanism is established within the group for members to raise concerns or report any suspicious activities within the Stokvel. Members are encouraged and obligated to report issues, fostering a culture of accountability. Should internal mechanisms fail to resolve specific issues, such issues may be escalated to the NASASA SRO.

10.Educational Programs:

Stokvels are mandated to access educational programs to enhance financial literacy among members. These programs ensure a comprehensive understanding of the rules and regulations governing the Stokvel, empowering members to make informed decisions.

11.Regulatory Recognition:

Stokvels are directed to actively seek recognition from relevant regulatory authorities. Collaboration with regulatory bodies is emphasized to ensure ongoing compliance within legal and ethical boundaries.

12.Deregistration and Penalties:

Groups are registered with NASASA based on their intention and parameters set out on the group’s constitution. There are cases where a group may stray from their original intention, and stray from the Stokvel regulatory framework. Consequences for non-compliance including penalties and potential deregistration. These consequences are communicated to members, highlighting the importance of strict adherence to established rules.

13.Collaboration with Regulatory Authorities:

Stokvels are authorized and encouraged to collaborate with regulatory authorities to address industry-wide challenges. Channels for information sharing and cooperation are established to facilitate ongoing compliance and a positive relationship with regulators.

14.Identification of Non-Stokvel Financial Activities and Warning Against Misrepresentation:

Individuals are cautioned against financial groups misrepresenting themselves as Stokvels but exhibiting characteristics inconsistent with the traditional Stokvel framework.

Key Warning Signs:

• Unrealistic Returns: Stokvels do not promise unrealistically high returns. Be wary of schemes that do.
• Exponential Growth Incentives: Authentic Stokvels don’t reward exponential growth in membership for financial incentives. Schemes doing so may indicate a pyramid-like structure.
• Misuse of Stokvel Name: Some schemes may misuse the term “Stokvel” to attract members. Genuine Stokvels should adhere to NASASA regulations.

15.NASASA’s Role as Sole Custodian:

NASASA, recognized by the South African Reserve Bank, holds the exclusive authority to determine what qualifies as a Stokvel and what does not.

Warning to the Public:

• Members of the public are strongly advised to verify the legitimacy of financial groups claiming to be Stokvels by consulting NASASA.
• NASASA is the sole custodian of Stokvel practices and adheres to industry standards, ensuring the security and compliance of genuine Stokvels.

This comprehensive framework, now with additional warnings, aims to formalize Stokvel operations while safeguarding the public against potential misrepresentation and guiding them on authentic Stokvel practices.