New app takes stokvels from traditional to digital
DURBAN - Dr Thomas Brennan, the former head of digital innovation at Discovery Health has launched an app that is the digital version of a traditional stokvel.
Franc is the name of the app and it makes saving and investing for people more simple and affordable.
With the app, people can access both the money market and an exchange-traded fund using their smartphone.
The app which was launched this week is for anyone that wants to grow their wealth.
There is no minimum investment amount and users can withdraw or transfer your money anytime without any penalties or hidden costs.
Access to the app is free for the first six months and thereafter there is an R5 membership fee. Members can get another six months free when they invite a friend to become a member in the first free six months.
On the reasons for creating the app, Brennan said that there is power in community and a stokvel is a mature, well-understood community structure.
Brennan said, "the Franc mobile app, is simply helping a community of people invest in the easiest way possible that reduces the current high barriers to accessing high performance, low-cost investments".
July is Savings Month and Brennan said that he is excited to bring Franc to South African consumers for the first time.
According to Brennan, South Africa has one of the lowest savings rates in the world and that is something he wants to change with Franc.
He said, "Franc brings increased value and wealth creation via passive investments to everyone, whilst encouraging them to save more".
Franc offers two investment options:
1. Allan Gray Money Market Fund that has returned an average of 7,87% interest over the past year
2. Satrix 40, an exchange traded fund (ETF) that was recently voted as South Africa's favourite ETF.
The stokvel members can choose how much money they want to invest, how often and how they would like to split their investment.
Members can select the Allan Gray Money Market Fund which has a lower risk or the higher risk option of Satrix 40 ETF.
With Franc, FICA is seamless. All the member needs to do is upload their proof of ID and address and take a selfie.
Franc is a member of AlphaCode, the fintech investment branch of Rand Merchant Investment Holdings. Dominique Collett the head of AlphaCode said what they found it interesting about Franc is how Brennan has adjusted a huge global finetch business model like Robinhood for the local nuances of the market in South Africa.
The team behind Franc is made up of eight people who have backgrounds in software development, actuarial science and machine learning, amongst other things.
The app is available on both iOS and the Google Play Store and so far the app has 90 users.
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- BUSINESS REPORT ONLINE