As many are effectively excluded from availing themselves of the services of financial institutions in the formal sector, they often form stokvels, an informal method of saving which is commonly practised in their home country. The research study was conducted to investigate the dynamics of Zimbabwean grocery stokvels in Cape Town and the factors which have encouraged their formation. A mixed-methods approach was adopted, and both quantitative and qualitative research methods were used to collect the data. The quantitative data was (...) obtained through the administration of a survey questionnaire. In contrast, the qualitative data was obtained by conducting one-on-one semi-structured interviews with leaders of Zimbabwean grocery stokvels, their spouses, and members of their families who did not belong to their stokvels. The qualitative data was augmented through the taking of field notes during the interviews. The results indicate that Zimbabweans in Cape Town form grocery stokvels due to severe shortages of basic necessities in Zimbabwe. Their participation in stokvels enables them to accumulate funds to purchase the groceries which they need to sustain themselves and their families in the absence of assistance from financial institutions in the formal sector and also to assist their families and relatives in Zimbabwe to cope with their dire economic circumstances by sending groceries to them. (shrink)

While immigrants are at liberty to start self-help financial associations (referred to as stokvels in South Africa) to cater for their unfufilled need for capital, the benefits of this laudable effort are seldom maximised due to a number of shortcomings. Aim: This paper seeks to ascertain the operational obstacles that immigrant-run stokvels face and to suggest solutions accordingly. Method: Aiming to complement each other, quantitative and qualitative research approaches were utilised to conduct this study. Quantitative and qualitative data were collected (...) through a self-administered questionnaire and one-on-one in-depth interviews. Purposive sampling technique was employed to reach the 123 participants who responded to the survey questionnaire and the 10 that took part in oneon-one in-depth interviews. Results: The typical immigrant African entrepreneur who participates in a stokvel, is a married male between ages of 30 and 46, and is fairly educated. While most of the respondents conceded that their stokvels faced operational problems, they also noted that the default on loan repayment and unskilled personnel on the loan management team were the issues of a greater concern. Hence, providing training and practical management skills becomes paramount to the smooth functioning of these stokvels. Uniqueness and implications: Though presumed to be a possible source of finance for immigrant-owned businesses, most studies have not explored the operational challenges that stokvels in South Africa face. The lessons drawn from this study may be of benefit to the respondents, policy-makers and academics. (shrink)