Motshelo is a traditional communal savings and investment system practiced in some Southern African communities, particularly in Botswana. It is similar to other informal group savings schemes found in many cultures worldwide.
How Motshelo Works:
- A group of people (friends, family, or community members) contribute money regularly to a common pool.
- The funds are then used for various purposes, such as:
- Helping members with financial needs (e.g., emergencies, school fees, or business investments).
- Organizing social events like weddings or funerals.
- Growing the savings collectively and redistributing profits among members.
- The system is built on trust, social bonds, and mutual assistance.
Does Motshelo really help people?
Motshelo (similar to stokvels) can really help people, especially in communities where access to traditional banking or credit facilities is limited. Here’s how it works and how it can benefit people:
- Saving Together: A group of people contribute a fixed amount of money regularly, and each member gets a chance to take out a lump sum at some point. This helps people save money they might otherwise struggle to set aside on their own.
- Loans: Some Motshelo groups also offer loans to members, which can come at lower interest rates than commercial loans or credit cards. This can be crucial for emergencies, buying items in bulk (like groceries or appliances), or funding a small business.
- Community Support: It’s a system based on trust, where members rely on each other for financial support. This sense of community can make people feel more secure about saving and investing.
- Building Financial Discipline: Regular contributions can encourage discipline in saving, which can be hard to achieve alone. It’s also a great way to plan for future expenses, like holidays, weddings, or education.
- Better Bargaining Power: With a larger pool of money, some groups use it for bulk purchasing, which can reduce costs for members. This helps people stretch their money further.
However, its success really depends on the reliability of the group and the transparency of its management. When poorly managed or without trust, it can lead to conflicts or losses. It’s essential that the members of the group agree on clear rules and have accountability in place.
