Our traditional motshelo saving scheme needs a rethink. Time has come to move from merely saving money to investing it to build wealth. Such an approach requires a long-term perspective. It must go beyond annual cash pay-outs and groceries, which often meet just short-term needs. Motshelo should be seen as a viable and sustainable investment vehicle that every Motswana can take advantage of.
This is not to say that the current motshelo model is futile, rather it should be seen as a call to improve the status quo – how we have been doing things. There is doubt that the conventional model continues to play a key role in encouraging the culture of saving, improving consumer demand, living standards, and ultimately contributing to the development of the economy as a whole. It remains a powerful weapon in the fight against poverty and uplifting women in communities.
However, the model can be leveraged to raise capital for business ventures and other long-term assets, such as property, shares and bonds. First, members have to develop an inclusive investment strategy. All members should understand and agree with the chosen investment strategy. This is critical, especially at the formation of motshelo group. This is to ensure that the model is sustainable such that members do not pull out as and when it pleases them to do so. Besides, members must also be made aware that every investment carries some level of risk. As such, the group should choose an investment strategy that everyone will be comfortable with. In other words, it should match their risk profile.
An investment motshelo must have a clear structure that is geared for growth. As much as motshelo is primarily informal, it is advisable to adopt a legal structure that is aligned to the group’s vision and investment strategy. Motshelo can be converted into a limited liability company or a cooperative society.
Another important aspect is to rope in people with certain expertise, particularly in accounting and law. This will reduce the operational costs of engaging experts from outside. With investments, you cannot avoid legal consultation. At some point, the group will have to sign shareholders agreements and other legally binding contracts.
With all being said, motshelo can be likened to a crowdfunding model, which is gaining popularity among start-ups across the world. Crowdfunding just like motshelo involves pooling money from a large number of individuals, but the difference is the funds are purely to finance a business venture. The “crowd” in crowdfunding refers to the people that provide the money. What makes it successful is that it leverages on the vast network of investors through social media and online platforms. Investors can contribute from as little as P100. Investors benefit by getting paid dividends (in case of equity-based crowdfunding) or receive special rewards or interest (in case of loan-based crowdfunding).
Nonetheless, motshelo can be revamped into a powerful investment solution by leveraging on the network of people just like a crowdfunding model. I must iterate, it requires a long-term perspective, and commitment. Members must be willing to stay in for the long haul. It may take years before the group realise some returns.
Above all, transforming motshelo groups into investment groups can empower people, mostly women, to move from the informal to the mainstream economy.
Disclaimer: Otisitswe K. Tawana-Madziba is the founder of Fin-Edu, a social enterprise that empowers young people with social and financial education. Email: [email protected] or visit: www.fin-edubw.com.
