Stokvel saving and banking sector liquidity in South Africa: cointegration and short-run dynamics


  • Lindiwe Ngcobo Ph.D., Lecturer Department of Finance, Risk Management and Banking, University of South Africa, Pretoria, South Africa
  • Joseph Chisasa Joseph Professor, Chair College of Economic and Management Science Transformation, University of South Africa, Pretoria, South Africa
  • Mantepu Tshepo MaseTshaba Ph.D., Director School of Economic and Financial Sciences, College of Economic and Management Sc., University of South Africa, South Africa



stokvel, banking sector liquidity, ARDL, ECM approach


Stokvel is a term used in South Africa to denote an informal saving club. A large population of South Africa are members of one stokvel or the other. A large amount of stokvel savings go unaccounted for in the banking sector resulting in distortions in the flow of funds in the banking sector. Thus, the objective of this paper was to establish the presence of a long-run relationship and causality between stokvel savings, money supply, gross domestic product growth rate and banking sector liquidity in South Africa. Applying the Autoregressive Distributed Lag (ARDL) and Error Correction Model (ECM) techniques on quarterly time series data for the period from 1987Q3 to 2020Q1, the study reveals that in the long run, stokvel savings and money supply were found to have a negative relationship with banking sector liquidity albeit insignificant, however, gross domestic product growth rate exhibited a negative and statistically significant relationship at 1%. The coefficient of the error correction model (ECM(-1)) was, as expected, negative and statistically significant thus providing evidence of a short-run relationship. This study concludes that informal savings must be included in the formal banking services to harness the cash that is held by the informal sector and thus improve banking sector liquidity while minimizing the prevalence of financial disintermediation.


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Author Biography

Lindiwe Ngcobo, Ph.D., Lecturer Department of Finance, Risk Management and Banking, University of South Africa, Pretoria, South Africa

Ph.D., Lecturer Department of Finance, Risk Management and Banking, University of South Africa, Pretoria, South Africa


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How to Cite

Ngcobo, L., Joseph, J. C., & MaseTshaba, M. T. (2023). Stokvel saving and banking sector liquidity in South Africa: cointegration and short-run dynamics. International Journal of Research in Business and Social Science (2147- 4478), 12(7), 263–270.



Financial and Economic Studies