Stokvels are increasingly being recognised as a solution to contribute to income generation
and wealth creation, especially amongst low-income earners who are excluded from the formal
financial markets. This study investigates the contribution of stokvels to income generation and
wealth creation in Eswatini focusing on the poorest region, Lubombo. The study uses 436 stokvel
participants which were accessible through NGOs (Joyful-heart, Bantwana Initiative, Imbita Women
Finance Trust, and World Vision) which promote savings groups in the country, Lubombo region.
The study employs Principal Component-based asset index as a proxy for assets accumulation (wealth
creation). The findings from the descriptive statistics indicate that women are dominating stokvels
participation in households. In support of income generation, the participants in the study are capable
of saving up to E796,123 per annum, and the total loan amount issued increases the total contributions
by 6.7%. The generated revenue results for a total of E0.8m. Even though the prominent goals for
most of the participants are consumptive, still members can acquire assets and accumulate wealth
through borrowing before the cycle matures, thus significantly increasing their socioeconomic status.
The study recommends an establishment of a stokvel representative body (such as Eswatini National
Association of Stokvels) to capture the Lilangeni value of stokvels that generate in the informal
economy, as well as assist in promoting stokvels campaigns for information exchange platform, deal
with other stokvels issues of interest, and create and monitor a stokvel data base in the country.

Download PDF