[TYPE THE COMPANY NAME]
OTE2601 Assignment 3
(COMPLETE ANSWERS)
2025 - DUE 8 July 2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
, Exam (elaborations)
OTE2601 Assignment 3 (COMPLETE
ANSWERS) 2025 - DUE 8 July 2025Course
Orientation to teaching Economic (OTE2601)
Institution
University Of South Africa (Unisa)
Book
Principles and Pluralist Approaches in Teaching Economics
OTE2601 Assignment 3 (DETAILED ANSWERS) 2025 - DISTINCTION
GUARANTEED - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED
Answers, guidelines, workings and references ,.
QUESTION 1 Stokvels are popular and even banks offer stokvel options.
Opening a stokvel account with a bank provides members with the security
they do not get with informal stokvels. Compare the stokvel account from
FNB or Standard Bank with the stokvel account of ABSA or Nedbank. In your
answer, elaborate on the types and roles of various stokvels. (25)
Stokvels are a unique and deeply entrenched part of South African culture, representing a
traditional form of community-based savings and investment. While historically informal, their
significant economic contribution and social role have led major banks to offer formal stokvel
accounts, providing enhanced security and financial benefits.
Types and Roles of Various Stokvels
Stokvels are voluntary associations of individuals who pool their resources for a common
purpose, often on a rotational basis. They are built on trust, shared goals, and mutual support.
Their roles extend beyond mere financial transactions, encompassing social cohesion, financial
discipline, and collective empowerment.
Here are the main types and their roles:
1. Rotational Stokvels (ROSCA - Rotating Savings and Credit Associations):
o Type: This is the most common and traditional form. Members contribute a fixed
amount regularly (weekly, fortnightly, or monthly). The accumulated lump sum is
paid out to each member on a rotating basis.
o Role: Provides members with access to a larger sum of money than they could
save individually in a shorter period. The funds can be used for any purpose, such
as paying off debt, making a large purchase, or starting a small business. It fosters
financial discipline as members are obliged to contribute.
2. Savings Stokvels/Clubs:
, o Type: Members contribute regularly to a common pool, and the entire sum, often
with accumulated interest, is distributed to each member, or used for a collective
purpose, at the end of a predefined cycle (e.g., annually).
o Role: Encourages consistent saving towards a specific goal, such as year-end
groceries, school fees, or holiday expenses. It instills saving habits and provides a
secure collective fund.
3. Grocery Stokvels:
o Type: Members contribute money throughout the year specifically for purchasing
groceries in bulk, usually around the festive season (November/December).
Purchases are often made from wholesalers for discounts.
o Role: Helps households manage the high costs of groceries, especially during
peak seasons. Buying in bulk leverages collective purchasing power, offering
significant savings.
4. Burial Societies (Funeral Stokvels):
o Type: These provide informal insurance to help members and their families with
funeral costs. Members contribute regularly, and the society pays out a set benefit
upon the death of a member or their covered dependents. Many now also facilitate
formal funeral policies underwritten by insurance companies.
o Role: Offers a crucial safety net for funeral expenses, alleviating financial burden
during times of bereavement. Beyond monetary support, they often provide
practical and emotional support to grieving families.
5. Investment Stokvels/Clubs:
o Type: These groups pool funds with the explicit purpose of growing their
collective wealth through investments. This can include investing in bank
accounts (earning interest), collective investment schemes, shares, property, or
even starting a collective business venture.
o Role: Provides access to investment opportunities that might be inaccessible to
individuals due to limited capital. It promotes financial literacy, wealth creation,
and can lead to significant asset accumulation for members.
6. Social Clubs/Party Stokvels:
o Type: Funds are pooled to finance social activities, gatherings, or specific events
like birthday parties or celebrations.
o Role: Enhances social cohesion, facilitates communal celebrations, and
strengthens bonds among members.
7. Borrowing Stokvels:
o Type: Members pool money to provide loans to other members, often at interest
rates lower than commercial banks but higher than informal family loans,
ensuring the sustainability of the fund.
o Role: Offers accessible credit to members who may not qualify for traditional
bank loans, providing a vital source of emergency funds or capital for small
ventures.
Comparison of Stokvel Accounts: FNB/Standard Bank vs. ABSA/Nedbank
, While all major South African banks now offer stokvel accounts, their features, benefits, and
requirements can vary. Generally, bank-offered stokvel accounts provide security, transparency,
and often interest accumulation, which are less prevalent in informal arrangements.
Here's a comparison based on typical offerings, noting that specific features and interest rates can
change and are subject to the bank's terms and conditions at any given time.
FNB Stokvel Account
Key Features:
o Transparency & Digital Access: All members can typically view account
balances and statements via the FNB App, Online Banking, and Cellphone
Banking. This enhances trust and transparency.
o Security: Payouts often require approval from multiple signatories (e.g., at least 2
or 3), adding a layer of security against fraud.
o Interest Earning: Competitive interest rates are typically offered, allowing the
stokvel's savings to grow.
o Convenience: Supports digital contributions (EFT) and payouts, reducing the
need for cash handling and associated risks. Free cardless cash deposits at FNB
ATMs are often available.
o Additional Benefits: May offer discounted funeral cover through a Group
Funeral Plan for members. Signatories can manage members (invite, edit, delete)
and approve payouts directly.
o Requirements: Usually requires 3 signatories, their IDs, proof of residence, and
the group's constitution.
Standard Bank Stokvel/Society Scheme Savings Account
Key Features:
o Interest Earning: Offers tiered interest rates, meaning higher balances earn more
interest, encouraging larger collective savings. Interest is usually calculated daily
and paid monthly.
o Accessibility: Unlimited deposits with immediate access to savings. Often
provides a certain number of free ATM and branch deposits.
o Fee Structure: May offer zero monthly fees if the account balance is maintained
above a certain threshold (e.g., R10,000).
o Flexibility: Ability to make deposits and withdrawals at any branch, and transfer
part or all of the balance to other investments.
o Security: Like FNB, multiple signatories are required for transactions, ensuring
accountability.
o Additional Benefits: May include automatic entry into monthly savings draws or
similar loyalty benefits.
o Requirements: Typically requires IDs and proof of residence for a certain
number of group members and authorized signatories (e.g., at least 5 members
and 3 signatories) and a group constitution.
OTE2601 Assignment 3
(COMPLETE ANSWERS)
2025 - DUE 8 July 2025
NO PLAGIARISM
[Pick the date]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
, Exam (elaborations)
OTE2601 Assignment 3 (COMPLETE
ANSWERS) 2025 - DUE 8 July 2025Course
Orientation to teaching Economic (OTE2601)
Institution
University Of South Africa (Unisa)
Book
Principles and Pluralist Approaches in Teaching Economics
OTE2601 Assignment 3 (DETAILED ANSWERS) 2025 - DISTINCTION
GUARANTEED - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED
Answers, guidelines, workings and references ,.
QUESTION 1 Stokvels are popular and even banks offer stokvel options.
Opening a stokvel account with a bank provides members with the security
they do not get with informal stokvels. Compare the stokvel account from
FNB or Standard Bank with the stokvel account of ABSA or Nedbank. In your
answer, elaborate on the types and roles of various stokvels. (25)
Stokvels are a unique and deeply entrenched part of South African culture, representing a
traditional form of community-based savings and investment. While historically informal, their
significant economic contribution and social role have led major banks to offer formal stokvel
accounts, providing enhanced security and financial benefits.
Types and Roles of Various Stokvels
Stokvels are voluntary associations of individuals who pool their resources for a common
purpose, often on a rotational basis. They are built on trust, shared goals, and mutual support.
Their roles extend beyond mere financial transactions, encompassing social cohesion, financial
discipline, and collective empowerment.
Here are the main types and their roles:
1. Rotational Stokvels (ROSCA - Rotating Savings and Credit Associations):
o Type: This is the most common and traditional form. Members contribute a fixed
amount regularly (weekly, fortnightly, or monthly). The accumulated lump sum is
paid out to each member on a rotating basis.
o Role: Provides members with access to a larger sum of money than they could
save individually in a shorter period. The funds can be used for any purpose, such
as paying off debt, making a large purchase, or starting a small business. It fosters
financial discipline as members are obliged to contribute.
2. Savings Stokvels/Clubs:
, o Type: Members contribute regularly to a common pool, and the entire sum, often
with accumulated interest, is distributed to each member, or used for a collective
purpose, at the end of a predefined cycle (e.g., annually).
o Role: Encourages consistent saving towards a specific goal, such as year-end
groceries, school fees, or holiday expenses. It instills saving habits and provides a
secure collective fund.
3. Grocery Stokvels:
o Type: Members contribute money throughout the year specifically for purchasing
groceries in bulk, usually around the festive season (November/December).
Purchases are often made from wholesalers for discounts.
o Role: Helps households manage the high costs of groceries, especially during
peak seasons. Buying in bulk leverages collective purchasing power, offering
significant savings.
4. Burial Societies (Funeral Stokvels):
o Type: These provide informal insurance to help members and their families with
funeral costs. Members contribute regularly, and the society pays out a set benefit
upon the death of a member or their covered dependents. Many now also facilitate
formal funeral policies underwritten by insurance companies.
o Role: Offers a crucial safety net for funeral expenses, alleviating financial burden
during times of bereavement. Beyond monetary support, they often provide
practical and emotional support to grieving families.
5. Investment Stokvels/Clubs:
o Type: These groups pool funds with the explicit purpose of growing their
collective wealth through investments. This can include investing in bank
accounts (earning interest), collective investment schemes, shares, property, or
even starting a collective business venture.
o Role: Provides access to investment opportunities that might be inaccessible to
individuals due to limited capital. It promotes financial literacy, wealth creation,
and can lead to significant asset accumulation for members.
6. Social Clubs/Party Stokvels:
o Type: Funds are pooled to finance social activities, gatherings, or specific events
like birthday parties or celebrations.
o Role: Enhances social cohesion, facilitates communal celebrations, and
strengthens bonds among members.
7. Borrowing Stokvels:
o Type: Members pool money to provide loans to other members, often at interest
rates lower than commercial banks but higher than informal family loans,
ensuring the sustainability of the fund.
o Role: Offers accessible credit to members who may not qualify for traditional
bank loans, providing a vital source of emergency funds or capital for small
ventures.
Comparison of Stokvel Accounts: FNB/Standard Bank vs. ABSA/Nedbank
, While all major South African banks now offer stokvel accounts, their features, benefits, and
requirements can vary. Generally, bank-offered stokvel accounts provide security, transparency,
and often interest accumulation, which are less prevalent in informal arrangements.
Here's a comparison based on typical offerings, noting that specific features and interest rates can
change and are subject to the bank's terms and conditions at any given time.
FNB Stokvel Account
Key Features:
o Transparency & Digital Access: All members can typically view account
balances and statements via the FNB App, Online Banking, and Cellphone
Banking. This enhances trust and transparency.
o Security: Payouts often require approval from multiple signatories (e.g., at least 2
or 3), adding a layer of security against fraud.
o Interest Earning: Competitive interest rates are typically offered, allowing the
stokvel's savings to grow.
o Convenience: Supports digital contributions (EFT) and payouts, reducing the
need for cash handling and associated risks. Free cardless cash deposits at FNB
ATMs are often available.
o Additional Benefits: May offer discounted funeral cover through a Group
Funeral Plan for members. Signatories can manage members (invite, edit, delete)
and approve payouts directly.
o Requirements: Usually requires 3 signatories, their IDs, proof of residence, and
the group's constitution.
Standard Bank Stokvel/Society Scheme Savings Account
Key Features:
o Interest Earning: Offers tiered interest rates, meaning higher balances earn more
interest, encouraging larger collective savings. Interest is usually calculated daily
and paid monthly.
o Accessibility: Unlimited deposits with immediate access to savings. Often
provides a certain number of free ATM and branch deposits.
o Fee Structure: May offer zero monthly fees if the account balance is maintained
above a certain threshold (e.g., R10,000).
o Flexibility: Ability to make deposits and withdrawals at any branch, and transfer
part or all of the balance to other investments.
o Security: Like FNB, multiple signatories are required for transactions, ensuring
accountability.
o Additional Benefits: May include automatic entry into monthly savings draws or
similar loyalty benefits.
o Requirements: Typically requires IDs and proof of residence for a certain
number of group members and authorized signatories (e.g., at least 5 members
and 3 signatories) and a group constitution.
