STANLIB first as Chuma enters stokvel market
STANLIB, South Africa's largest unit trust company, today (Monday, May 14) claimed an industry first as it introduced the only investment product yet targeted at the huge stokvel market.
The informal savings market in South Africa is estimated at R12 billion a year, money sometimes channelled into simple savings accounts or left as a central 'cash-stash' to be accessed as required by stokvel members.
The STANLIB newcomer - Chuma - has been 18 months in development and achieves the required level of affordability by leveraging group resources at Standard Bank and Liberty Life (sister companies of STANLIB).
Dinky Moropane, STANLIB's director of retail business development, commented: "Our research confirmed huge appetite for inflation-beating returns the sort of growth that is only achievable in the long-run by an investment product as opposed to a savings account.
"At the same time, stokvel members demand low fees, high levels of capital protection and ready access to their money in an emergency. These factors have traditionally hindered the development of high-performing financial products for the mass market.
It is very important for us that Chuma is accessible for all investors. As a result, the product will be distributed through Liberty Life and Standard Bank Financial Consultants distribution channels. Other distribution channels will be explored and considered based on how the market responds to the Chuma offering.
Capital from Chuma account-holders is kept in the relatively low-risk STANLIB Cash Plus Fund. Monthly income is then committed to the STANLIB Dynamic Return Fund a moderate-risk vehicle designed to significantly outperform the CPI.
Chuma is easy to access yet FICA-compliant. The key requirement verified proof of residence can be met by most residents of informal settlements.
Chuma is marketed to both individuals and groups.
Accountholders can commit as little as R50 a month or make a minimum lump sum investment of R1000. The monthly minimum for direct investment in the underlying unit trusts would be four times higher.
There are no lock-ins, no penalties for early withdrawal and cash can be accessed within 48 hours.
The maximum initial charge is 1.14% while a service charge of 0.86% is levied every year.
Dinky Moropane added: "We carried out a 'soft launch' in December. Feedback since then is extremely positive. Word-of-mouth inside communities and among workers on the factory floor has gone to work for us.
"We have avoided a hard-sell approach. We are happy for the people to see what we have to offer, compare it with all alternatives and then come to us for more information. The community will tell us whether we have a winner or not.
"The most frequently heard comment is "Why didn't we have something like this before?' an indication that Chuma meets all the key needs of this market."
