The National Stokvel Association of SA (Nasasa) has warned South Africans that WhatsApp stokvels are most likely to be pyramid schemes rather than genuine savings vehicles according to news reports.
A stokvel is a savings scheme where a group of people come together to save or increasingly invest, jointly. The reports followed after WhatsApp messages had done the rounds encouraging people to invest in a stokvel for R 200 and make R 1 000 profit according to Jacaranda fm news.
Like most pyramid schemes, the first to join receive payouts but those who follow later generally lose their money.
Founder and chairperson of Nasasa, Andrew Lukhele, told TimesLive that scammers were using the popularity of stokvels to create pyramid schemes and take advantage of people. He said that traditional stokvels are based on trust, where everyone in the stokvel knows each other, and the terms of payout have been set. According to Lukhele, the WhatsApp scams involve anonymous people so it is impossible to trace the money when it disappears.
*Article adapted from BusinessInsider