Personal Finance | Why United African Stokvel was never legit | City Press

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Not all investments work out, but there is a difference between a legitimate investment that carries risk versus one that is a scam

“In essence, a stokvel is a community. There is always a clear starting point where they met and [it’s evident] who the founding members are.

Palesa Lengolo, the author of Stokvels: How they can make your money work for you, says that, while anybody can start a stokvel, the question should be whether it really is a stokvel or the founders are disguising it as one. If you invest using a platform such as Fedgroup or SV Capital to buy motorbikes, cattle or vegetables, those are investments, not a stokvel.

She adds that a common feature of all these scams is their ability to package themselves to look attractive. When a stokvel makes an investment decision, it is important for the members to understand the risks involved. .

 

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