South African startup Franc is taking the traditional stokvel savings and investments concept digital with its new smartphone app.
The Franc app aims to make investing simple and affordable, giving stokvel members access to the money market and an exchange-traded fund via their mobile phones.
Franc has no minimum investment amount, with users able to withdraw or transfer money at any time without penalty, while there are no hidden or complicated fees. Access is free for the first six months, with the membership fee thereafter ZAR5 per month.
“We are excited about bringing Franc to South African consumers for the first time during Savings Month,” said Dr Thomas Brennan, founder of Franc and ex-head of digital innovation of Discovery Health.
“South Africa has one of the lowest savings rates in the world: for the vast majority of South Africans, accessing investment opportunities is expensive and difficult. This is something that we want to change with Franc, which is now the most affordable way to access the money market and exchange traded funds.”
He said financial services firms usually offered complex products with high fees, which reduces the value for the consumer, especially over the long run. Franc, however, has removed all the barriers and only kept what really works.
“No more dealing with brokers, no more paperwork, and no more complicated fine print – everything is done through the mobile app. Franc brings increased value and wealth creation via passive investments to everyone, whilst encouraging them to save more,” Brennan said.
Franc’s two investment options – the Allan Gray Money Market Fund and Satrix 40 – were selected because of their credibility and low cost. Stokvel members simply choose how much they would like to invest, how often, and how they would like to split their investment.