Inside the motshelo nest-egg
Nnasaretha Kgamanyane | Friday May 8, 2015 13:00
Mmegi: What was the motivation behind setting up the Motshelo account and please give us its brief?
Sefena: We are a bank that exists to help Batswana prosper, and towards the end of 2011, we noted reports of security issues within metshelo, stories of funds being stolen and a lack of reconciliation where members did not benefit from what they had been saving for. Additionally, most groups used spread sheets or even notebooks for reconciliation but at the end of the year, there was no guarantee that these numbers would depict the real picture.
We then started brainstorming ways we could provide a solution and empower these groups as we also realised that this would be in line with enhancing financial inclusion, because many of these groups were made up of mature, unbanked members. The account was simplified; we don’t require a registration certificate or constitution. These people are informal and range from groups of friends to family members; a motshelo is a household savings vehicle and that would be too much. We only need a minimum of two members, a signed confirmation form of just one page where you state your members, the group’s name and your signatories. The benefits include free chequebook, account monitoring sms alerts, accident death benefits of P2,000 for each member up to ten members and monthly statements to help your reconciliation.
Mmegi: The perception is that your head-office abroad dictates to its subsidiaries on the products to be offered. How did you push through the motshelo product?
Sefena: It’s an issue of being innovatively proactive. We live in this market and see how Batswana live. It’s upon us to take these issues with the seriousness they deserve and provide solutions. It is our responsibility as a service provider to be in sync with the market at all times for changing customer needs, tastes, preferences and lifestyles.
Mmegi: How has the market responded to the product?
Sefena: We launched the Motshelo Savings product in September 2012 and it’s still in a growth stage. We are currently focusing on creating awareness in order to reach the entire market.
Mmegi: What trends have you noticed in the product’s performance?
Sefena: This product is seasonal. Towards the beginning of the year, there’s a peak in sales as groups come to sign up. In terms of balances, these shoot up by the third quarter and we see the book really rising at that point. Around November and December, we know to expect a 50 percent drop, as the groups cash out and share their proceeds. A lot of our members are those groups saving to share at the end of the year.
Also, we associate motshelo with year-end, however some share in January because they reckon that the money from salaries will be under pressure, while others say April. There’s no prescribed time to start a motshelo, from April, May or June, but obviously, if you are targeting pay-outs in December, it’s better to start early.
For many, April is a good month, as they will have received salary increases from their employer, such as government, and thus have a little extra to save.
Mmegi: Have you noticed specific age or geographic trends?
Sefena: For the past three years, it has always been different types of members coming through with different types of metshelo. When we started, we had the traditional motshelo run by elders, but we have been spreading awareness saying to youngsters “you can also do it for your birthdays and bridal showers.” As a result, we are seeing the young market coming to register their groups. We thought this market was passive, but we are seeing them embrace the product along with other age groups.
We cannot say the product is popular in such a place or has been received better somewhere. It is popular countrywide. We have a group of very old women near Molepolole who came together and started a fund raising project through cooking and selling perishables. They sell their food and contribute as low as P10 towards improving their lives.
Mmegi: There’s an ongoing concern around banking system liquidity. What does this mean for the Motshelo Savings product?
Sefena: The liquidity issue presents an opportunity for banks to innovate around the products and services they offer and at Barclays we have led the way. The Motshelo Savings Product actually won the global Barclays Citizenship Awards in 2013, beating other Barclays’ franchises in Africa, Middle East and the Indian Ocean.
The liquidity issue is also an opportunity for customers to save together and reap the benefits. The traditional motshelo is a vehicle or social facilitator of kutlwano and doing things together. It is in times like this that as customers we come together and put the little we have together.
If you look at the stokvels of South Africa, some of them have set up successful companies or bought shares in corporates.
This is an alternative to only waiting for the bank to lend you money. When the liquidity rises and banks are reluctant to offer lending facilities, these alternative savings will help you build your own money. We often believe “the bank will give me money” instead of building our own wealth.
Mmegi: While the motshelo balances cannot be a source of liquidity or banks, what do they represent for you?
Sefena: For us, Motshelo goes beyond that. It’s a social facilitator responsible for building communities. Small beginnings should not be despised as they have the potential to become the engine for bigger responsibilities.
We have seen Stokvels grow in South Africa and cater for responsibilities we never thought possible.