Nicky Swartz; Lorna Mclaren
What they do:
Savings and group credit services to female street vendors
How it works:
Vendors in need of working capital join Spoon Money as a stokvel group. The model requires members to save in the Spoon Money stokvel where members’ savings are invested with an asset manager to provide returns from the capital market.
With a minimum savings balance reached, the stokvel group is able to apply for credit which is used to buy stock. The group loan builds on stokvel principles of trust, social pressure, and social capital to mitigate defaults.
SpoonMoney was founded to provide better value for stokvel saving groups. Having managed her family stokvel for almost a decade, Nicky Swartz was aware of how badly served this segment is by banks in particular.
Couple this with a stint working in asset management, she perceived a gap to provide better value to dedicated savers. The idea was to digitize intra-stokvel transactions for greater transparency and efficiency and offer access to capital markets.
This idea bombed as no real consumer needs were being addressed. However, in the course of discovery, she bumped into many groups of street vendors using stokvels to fund working capital requirements at very expensive rates.
This prompted Spoon’s first pivot to focus on a different segment with a clear need that is not being met by the formal sector and badly served by the informal sector. Spoon’s credit solution was well-received but remaining true to the initial intent to drive external capital into townships via returns, the savings solution was reignited.
It was at this point that business partner Lorna McLaren joined Spoon and formalized both the mechanism and processes to manage stokvel savings. Two years into its life, Spoon Money now provides a route to greater financial stability for female street vendors using a combination of saving and credit.
How to contact them:
Akro’s Take on Spoon Money:
We met Spoon Money through an Akro Accelerate startup program funded by the SA SME Fund, in which Nicky and her team were selected and participated. We’ve had extensive engagements with them, from general chats to in-depth strategy sessions.
The founders of Spoon Money are a powerhouse female team. They are ultra-engaged and very intense, without any hint of arrogance. In particular, they showed an incredible willingness to work hard and serve their customers’ needs, and soaked up all the information and advice that was discoursed throughout the Akro Accelerate program.
They take advantage of any opportunity that comes their way and straddle the line between social impact and good business practices with ease. In our opinion, Spoon Money is well-placed to drive innovation and value in the informal, low-income market segment, and we recommend them to investors and consumers alike.
What is a Stokvel?
An informal group providing a mechanism to save together or provide capital to each other (gooi-gooi/rational scheme), although there are very many versions of stokvels. Saving stokvels have the main benefit of enforcing the commitment to save for a particular purpose such as year-end grocery purchases (through social pressure) but also provide social benefits of mutual support, trust and networks. Gooi-goois are rotational schemes which demand high levels of trust and commitment as monthly savings are accumulated for the benefit of one recipient in any given month.