The second type of stokvel, known as an investment club, involves pooling money after each meeting to purchase assets like businesses or taxis for investment. This pooled money is typically deposited in formal financial institutions such as banks or life insurance companies. The functioning of investment clubs is similar to investment accounts in banks.
summarise:
The second type of stokvel is the investment club. The entire pool of money is banked after each rotational sitting. The goal of these clubs is to buy an asset, such as a business or a taxi, for investment purposes. The pool is often invested in formal financial institutions — banks and life insurance companies. The activities of this type of stokvel may be compared to investment accounts held by banks.
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