Not only does this common noun conjure images of a repository with fortunes in abundance, but its familiar use in everyday speak, hardly bothers to scrutinise the elaborate details that distinguish one from the other.

To disarm any elaborate explainer, patiently cue “Oksalayo”. But for convenience, South Africa’s colloquial streets may often refer collectively to “glorified stokvels”, “stokvels… that went to private school”, and other inspired slang, if not hilarious.

What’s the big deal with these “other” banks? Why would it seem only very few ever duly get off the ground, when more could take the national appetite for them by storm? Fasten your seatbelts.

Let’s start with the form, purpose and requirements for these different types of “alternative banks”. The handy “CFI start-up guide” from National Treasury provides useful clarity in this regard, defining the preferred Cooperative Financial Institutions (CFIs) name as “the umbrella term for member-based deposit-taking financial co-operatives, owned and controlled by their members who have a common bond and whose members choose to call themselves either a Credit Union, Savings and Credit Co-operative (SACCO), Financial Services Co-operative (FSC) and Financial Co-operative (FC)”. For sure “stokvel” was already taken.

From the comprehensive, all-encompassing definition, one could probably simplify the complexities down to a delicate balance between two distinct powerful, usually complimentary yet often conflicting features: One, the technical requirements: from model formulation, member lobbying to successful processing of the application and subsequent implementation and maintenance of the entity. Not surprisingly, this first portion enjoys relatively crystal-clear protocols and procedures, further entrenched by legal authority replete with statutes such as the Cooperatives Act of 2005, the Financial Sector Regulation Act of 2017 (FSR Act), the Cooperative Banks Act of 2007, the National Credit Act (NCA), and so forth. For good measure, specialist government entities have also been established to adequately deal with ensuring full compliance with all requirements to obtain the “Holy Grail”, that valuable license to trade within the RSA. This is where authorities such as the FSCA, the Prudential Authority, the Cooperative Banks Development Agency (CBDA), the Cooperative Banking Institute (CBI), the Cooperative Financial Institute (CFI), right up to the South African Reserve Bank, dutifully fulfill without fail the thankless role of “knighting” candidates.

It is also what the self-indulgent Sef’frican affectionately refers to as “(too much) admin”: a rolling-the-eye reference to any bureaucratic activity of arduous, often impossible tasks to overcome, such as “Proof of ID” or “of Residence”.

Hold on as we now scrutinize the other features from the definition. Also underlined is “members who have a common bond” as opposed to “what they choose to call themselves”, for now.

This second feature largely refers to those organic, often elusive forces ranging from perfect timing for favourable market conditions, the prevalent the social values, cultural nuances, any tacit and other implicit factors that may enhance prospects of success, growth and sustainability for the projects. Or compromise them, even after acing the first part. Of the two mandatories, the latter feature provides as much intrigue as it does challenges. The blurry, elastic nature of the framework it is based on has made it near impossible to establish a procedure as universally applicable and consistent as the first. Evolution of culture, being organic, is neither easy to grasp nor regulate.

Whereas any invitation to engage in the direct control, ownership or even shareholding in a “bank” formation will leave anyone salivating, the reality of the unique constructs and exhaustive legal requirements to get a new CFI up and then running can humble you. Unlike your fave, the stokvel. SA currently boasts just three established cooperative banks; the OSK Kooperatiewe Bank Beperk in Orania, Ditsobotla Cooperative Bank in the NW province and as of 2017, the Ziphakamise Cooperative bank. Contrast this with over 800 000 of stokvels in SA that collect an estimated R50 billion annually from over 11 million South Africans, according to the National Stokvels Association of SA (NASASA). It was quite astonishing to learn that at least one in two adults belongs to or participates in an alternative, communal savings, credit or investment setup or another. From stokvel, burial society to mogodisano or ubutyebi-this-or-that; the next couple of months will see activities within these “formal” units of the informal banking economy at their peak as they hack many a family holiday burden or back-to-school finances.

The need for a transformed financial marketplace more inclusive of previously marginalized communities has provided enough prompt for innovations as “informal indigenous or culturally aligned” groups try to evolve their stokvels into the scaled-up contemporary entities with deliberate commercial sensitivities. That is not to suggest the problem is with the application process. Far from it. In fact, the remarkable change in fortunes that controversially befell the likes of VBS, and the publicized hiccups experienced by potential new market entrants such as YWBN by Nthabeleng Likotse have left many perplexed if not disillusioned. How come most stokvels and societies tend to enjoy better longevity than their counterparts? Could the requirement of minimum capital resources ranging from R100k, R1million and R10million for the CFI’s, the co-operative and mutual banks respectively, be it? Maybe it’s the requirement to enlist at least 200 members before making an application? Afterall most people have a threshold tolerance to organize 6-9 family members before they become a rabble. Families can be hectic.

Truth is, culturally, communal schemes are not so much about material fortunes as they are about investing in collective well-being based on mutual trust and common values. Their indigenous origins can better be understood by “letsema/matsema”; that traditional practice where villagers rally together to till each other’s fields, at little or no cost to the host save for the odd lunch for participants. Resources and tasks are coordinated and shared within the community. From harvest, storage to milling and distribution for consumption, this economic system had the sole objective of making sure no one was left out or behind. It was the great equalizer between the haves and the have-nots. It was Ubuntu at its best.

Unfortunately, there are no faculties nor instruments with which to trigger or regulate Ubuntu in practice. Fortunately, for regulators such as the FSCA, the mandate is not to regulate culture as such. That is not to say an appreciation of the context within which the regulatory framework operates is not important. On the contrary, it becomes a priority purely to enable a conducive environment for a transformed, more inclusive financial sector. Until then, stokvel it is.