Stokvels can now opt for money market
An app has been launched to encourage stokvel members to save by investing in the money market.
Billed as South Africa’s lowest-cost investment platform‚ the smartphone app‚ Franc‚ was launched by Thomas Brennan‚ former digital innovation head at Discovery Health.
It will allow stokvel members to invest in money market and exchange-traded funds (ETFs) for R5 a month‚ the company said on Wednesday.
Like stocks‚ ETFs are listed on the JSE but track an index‚ like the top 40‚ a commodity‚ bonds or a basket of assets.
Access to Franc is free for the first six months and there is no minimum investment amount.
“You can withdraw or transfer your money at any time without penalty.
“There are no hidden or complicated fees‚” the company said.
Franc‚ a member of Rand Merchant Investment Holdings’ financial technology investment arm‚ launches at a feverish time for financial technology companies‚ a number of which are seeking to lower costs and improve access to financial services and products.
“South Africa has one of the lowest savings rates in the world.
“For [most] citizens‚ accessing investment opportunities is expensive and difficult‚” Brennan said.
“This is that we want to change with Franc‚ now the most affordable way to access the money market and exchange-traded funds.”
Franc’s two investment options are the Allan Gray money market fund and Satrix 40‚ which tracks the performance of the 40 largest companies listed on the JSE.
“Stokvel members simply choose how much they would like to invest‚ how often and how they would like to split their investment.
“They can choose between Allan Gray or the Satrix 40 ETF‚ or a combination of the two‚” Brennan said.