“Snuk’s work”: informal means to formal ends in
South Africa’s rural economy
Lizzie Hull
(Please don’t cite – no pseudonyms yet!)
The South African government’s attempts in recent years at reining in the so-called ‘second
economy’ has been accompanied by a proliferation of activities aimed at generating income and
financial opportunities in the context of continuing and pervasive unemployment. This paper is
about the government’s intervention into these activities, and the kinds of actions and economic
exchanges that emerge in addition, or in relation, to these. It considers the barriers that prevent
people’s entry into the financial mainstream, and the ways in which ‘informal’ economic activities
are a necessary part of overcoming such obstacles. Specifically the paper considers two
organisations operating in a rural area of northern KwaZulu-Natal. One is a locally organised
community bank, now with official accreditation and funding from a micro-finance branch of the
Department of Trade and Industry. The other is a saving club founded in 2002 by a local radio
station DJ.
Government intervention and formalisation: the micro finance paradigm
With a growing realisation in recent years of the failure of the free-market to provide stability and
financial security for a significant proportion of the world’s population, a global reconsideration of
the role of the state has taken place. Under continued pressure to reduce deficits, cut spending
and employ fiscal prudence, yet with the increasing acknowledgement of the necessity of state
provision for those apparently excluded from the remit of free-market, new forms of government
intervention are taking place. Many sectors are increasingly split between private services for the
well-off, and cheap, mass role-out of government services for the poor. This is represented in
health care, for example, by the split between private and primary health care. Outsourcing to the
private sector is another widespread strategy employed by the government to reduce the public
costs of service delivery. In South Africa, government tenders – private, short-term contracts for
service delivery or infrastructural development – are now a popular means of generating income
for many people who lack stable, permanent employment.
1
The movement towards micro finance, which has received considerable impetus in recent years,
represents a further reinforcement of this trend, with the state offering a distinct alternative to those
whom the mainstream financial services sector has been unable or unwilling to assist. This
represents not simply the incorporation of the ‘informal’ sector within that of the ‘formal’, but the
regulation, containment and continued separation of what former president Thabo Mbeki coined
‘the second economy’.
Moreover, this new kind of state regulation takes place not according to the administrative-style
bureaucracy of former welfarist governments, but under the influence of a new managerial
approach, in which civil servants are encouraged to assume autonomy and function creatively as
‘entrepreneurs’ and ‘decision-makers’, just as the institutions of state service-delivery are expected
to act as though they were private companies, operating according to an ethos of value for money,
competition and customer-oriented business principles. Newly emerging institutions of microfinance function on similar principles, with the costly tasks of bureaucratic administration and
management devolved to locally-founded organisations, and buttressed by an ideology of self-help,
individual social responsibility and entrepreneurialism. As a result, responsibility for citizen welfare
is falling increasingly upon individuals rather than the state (Comaroff & Comaroff 2009: 127-30).
Making money is often, counter-intuitively, twinned to an ideology of social responsibility that was
formerly assumed by the state.
Several government-related programmes and organisations set up recently represent a more
coherent strategy to regulate and assist the so-called ‘second economy’. The South African MicroFinance Apex Fund (SAMAF) was founded in April 2002, a branch of the Department of Trade and
Industry. Its goal is to ‘facilitate the provision of affordable access to finance by micro, small and
survivalist business for the purpose of growing their own income and asset base’, which aims to be
carried out via a ‘network of self-sufficient and sustainable micro-finance institutions’.1 The Micro
Agricultural Financial Institutional Scheme of South Africa (MAFISA) is a similar financial body,
offering loans rather than grants. Connected with the Department of Agriculture, it is focused more
specifically on developing small-scale farming. Like SAMAF, it directs its funds via financial
intermediaries responsible for the management of lending and repayment.
Those involved in its implementation have a clear plan to enable, regulate and standardise an
otherwise diverse set of practices. But this may be at odds with the expectations and activities of
its intended recipients. As the concept of formalisation implies, a compelling normative discourse
takes for granted a process from informal to formal in the implementation of micro finance
1
See the website: www.samaf.org.za
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schemes. How do such expectations influence or coincide with a more fragmented reality? What
tensions emerge as a result? In the first part of this paper I examine the setting up of a government
funded community bank that relies heavily on a perception of formalisation, envisaged in terms of a
journey towards a coherent end-point. Towards the end, I describe a different kind of organisation,
larger and more complex in structure, but without the same set of expectations.
Simunye Community Bank
Simunye (‘we are one’) was founded by a small group of cotton farmers working in the Makathini
area of the Umkhanyakude district of northern KwaZulu-Natal. After several years of failed
attempts at securing bank loans and government grants, these farmers finally decided to set up
their own financial institution. One of the founders, now the chairperson of Simunye, explained to
me their motivations for this:
We realised that when we went to institutions to borrow money, we had problems. They
used to ask for assets: “Do you have an asset? Do you own a house?” So that before
they give you money you’ve got to qualify. So it was so hard for us. That is why we
decided to see if we can make ourselves a banking institution.
They sought the guidance of a representative from SAMAF who advised that they must raise an
initial R100,000 in order to qualify for the status of an intermediary institution that would be eligible
for MAFISA funds. Several other requirements included the setting up of a board and committees
to oversee the running of the bank, and the acquisition of an office from which the bank would be
managed. The group of farmers agreed to raise this R100,000 by recruiting new members and
charging a R100 joining fee. They advertised the bank on a local radio station, Maputaland Radio,
and quickly raised the necessary funds, storing these in an account held at ABSA, a large
commercial bank with a branch in the nearby town of Jozini. The process took over three years to
finally reach the point of official accreditation. On 4th May 2010, the certificate was formally handed
to the chairperson of the newly formed community bank. The bank currently has about 1,150
members, both men and women, the majority of whom are local farmers. Others are small
business owners, such as vendors, tailors or hairdressers.
The bank received an initial grant of R200,000 from SAMAF, intended mainly for the training of
committee members, the renting of the office, office materials and equipment, and the employment
of one full-time administrative clerk. Further cash in the form of loans had been promised both by
SAMAF and by MAFISA on the condition that the bank is seen to be in full operation. This will be
determined by whether the bank has sufficient inflow and outflow to be deemed an active and
3
functioning financial institution. Board members and a SAMAF representative informed members at
a meeting on 14th April 2010 that those who continue to invest the highest amount with the most
regularity at this stage will be the first to be considered for loans. An ostensibly unanimous
agreement was reached at the meeting that all members would invest R50 each month into the
bank. Furthermore Mr Zondi, the SAMAF representative, encouraged members to move their
savings from other accounts and to begin to use Simunye as they would any other bank. Members
were entitled to withdraw at any time the money that they had invested, as in the case of a normal
bank account. Finally, he explained that should the bank fail, the money individuals invested would
be returned to them, with the exception of the initial R100 required for setting up the bank.
Failed expectations and tensions between members were already evident however. One member
responded indignantly, accusing the board of leading him to the false belief that his initial payment
of R100 would render him eligible for a loan. Standing up and pointing repeatedly at Mr Zondi,
Alson made clear that members’ distrust of the bank was exacerbated by Mr Zondi’s absence at
previous meetings, when each time they had expected him there. The coinciding of Mr Zondi’s
belated arrival and the announcement of further conditions to be met by individual members
evidently compromised Alson’s trust both of the individuals deemed to have control of, and access
to, the bank’s funds, as well as of the institution as a whole, to fulfil its perceived responsibility
towards him. Mr Zondi’s calm response diverted the moral onus away from himself and the bank,
and upon members themselves, in an attempt to redefine the terms of their discussion. ‘You expect
a loan from the bank’, he said, ‘but what do you think the bank expects from you?’ He paused,
repeated this question, and continued:
If you invest in the bank monthly, then you will be in a favourable position to receive
funding. If you are able to invest monthly, these records will be kept about you as a
further indication that you are a person who is able to refund, that you are reliable. So
as a result you can expect to receive a loan. As you yourself said, you came here to be
funded. But if we give you money without being refunded, who will lose out then? It will
be us: the bank! So we will give you funding based on your performance. At the
moment there is no money available to be lent. But soon it will be there. We’ll only lend
small amounts to begin with, for seeds and fertilizers for example. It would be
unreasonable for you to ask for a huge amount while the bank is still starting… The
government is here to help you, but it won’t help if there is no progress being
witnessed.2
This statement made clear the role of the bank not only in storing money but in storing memory
about individuals (Hart 1999). On the basis of the bank records, a person’s moral character – their
‘reliability’ and ability to deal responsibly with money – was to be judged; and loans allocated
accordingly. During a research interview, a board member expressed to me this notion of individual
2
This is an approximate translation from Zulu.
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responsibility in terms of ‘commitment’ to the bank: ‘Members must start to save in order for us to
see how many are committed to the bank. We won’t give money to those who aren’t committed’.
The statement by Mr Zondi also expressed a tension between the communal values upon which
the bank was based – implied in its name ‘we are one’ – and the interests of individuals, as people
were encouraged to invest more than others in order to increase their chance of receiving a loan.
The exchange between Mr Zondi and the bank member suggested a further set of tensions
between ordinary members and the board members. Mr Zondi’s statement rapidly slipped into the
style of a government official laying out rules and regulations, rather than an advisor to an
independent and locally-governed institution.
This uncertainty concerning the proximity of the bank to the domain of government regulation, and
the subsequently ambiguous role of board members and of Mr Zondi, emerged during a private
conversation with Alson, the member who had questioned Mr Zondi in the meeting. For himself
and two other farmers with whom we spoke, Mr Zondi had taken on the persona of a conniving and
corrupt middle-man, eager to make personal gains. A speculative conversation ensued between
the three men as they tried to sum up the character of Mr Zondi. One of them said:
We don’t trust anymore! We must keep a close watch on Mr Zondi, because maybe he
will lie to us. Mr Zondi was given money to give to us. The only thing he’s done is to
take that money to the other banks that he is using for his own good. He thinks only of
his own interest. He is giving the money to his banks, not to the people… He keeps
telling us to put more and more in, but we get nothing back. He is lending this money to
other banks.
Here, uncertainty over who the bank actually belongs to is evident. There is also an implied
perception of the government as a benign benefactor that is trying to help, but whose money is
intercepted by ambiguous intermediaries. He continued:
The only person who will help us is Siyaya, because Siyaya is the government himself.
That is where we get help. Siyaya promised in the last meeting that there are other
people who want to help Simunye. He is trying to get in touch with those people.
Mr Siyaya is the Deputy Mayor of Jozini, a well-known figure of local government in the area, who
has supported the bank from the outset. He was also speaking at the meeting to which I referred
above. This apparent trust in local government was reflected in another comment by a board
member: ‘The people, when they see the face of the municipality, they start to believe that this will
work, that this is the right thing’. Perhaps the more explicit and tangible role of Mr Siyaya
generated greater trust in his intentions, in contrast to that of Mr Zondi, a stranger from Durban
who seemed to occupy a dangerously liminal space in between the government and the bank
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itself, a middle-man through whom funds must be channelled and to whom the bank is
accountable. Thus, accusations of corruption abound, both with reference to Mr Zondi as well as to
other board members.
This confusion that underlies corruption allegations applies, fundamentally, to the institution of the
bank itself, which is felt to belong neither to the government, nor wholly to the members
themselves given the stringent conditions placed upon them. These tensions have to do with
efforts at stabilising the ‘domains of cognitive classifications’ that are vital for an institution’s
success (Guyer 2004: 127). This fragile stability is under threat from a variety of angles, the most
obvious being accusations of corruption. Another source of threat is a view of the bank as
parochial and unsophisticated in relation to the high-street commercial banks. Complaints
proliferate, for example, about the office being ‘in the forest’, away from the convenient location of
town. Criticisms centred around this and corruption allegation indicate the fear held by members of
reverting to the messy, uncertain and uncertified realm of the informal.
Instances of humour during meetings often played on this ambiguity. Jokes that attempted to
diffuse suspicions about corruption were common. During an announcement, the treasurer of the
bank jokingly lamented the pestering that he received from bank members who, eager to find
incriminating evidence against him, interrupted his trips to town by trying to identify whether his
new pair of trousers or new bag belonged to a particularly expensive brand. This unrelenting
badgering that he suffered was testimony, his joke implied, to the unreasonable and pedantic
nature of corruption accusations. Other jokes mocked the lack of sophistication displayed by the
bank. During a private conversation, one member had laughed at Mr Zondi’s suggestion of
transferring money from other accounts to Simunye, amused at the thought of how she would cope
when travelling to Cape Town in the absence of a Simunye branch located in the city. Both of
these examples, whilst humorous, expressed the feeling by members that the stability and status
of the bank as a feasible institution was under threat. Sometimes jokes combined both themes.
During a meeting on one occasion, Mr Siyaya – the Deputy Mayor of Jozini mentioned above –
encouraged the idea of moving the bank to a location in Jozini, suggesting that the current office
was not sufficient to act as a bank. He jokingly added that he would not like to put his savings into
that office, because that Mr Buthelezi [the treasurer] would come along and steal them’. He pointed
to Mr Buthelezi as he said this who gave an annoyed chuckle, provoking a stream of laughter from
members. Although joking, these comments also expressed genuine underlying fears about the
possibility of corruption.
Other jokes played on the perceived dependency of the bank upon the government, by mocking
the arbitrariness of the bureaucratic demands placed upon them. The chairperson laughed as he
6
suggested that, prior to shopping, members should put their money into the bank and withdraw it
immediately, in order to generate inflow and outflow that was required for the bank to appear in full
operation. Again, this light-hearted comment underlined the ambiguous proximity of the bank to the
state, and its inevitable acquiescence to government bureaucratic demands. Yet it was also a
genuine appeal based on the acknowledgement that should these demands fail to be met, the
bank would disintegrate, once again reverting to the informal realm. This highlights why so much
emphasis was placed upon the certificate of formal accreditation and its acknowledgment
ritualized; it offered a concrete symbol of successful formalisation and acted as a kind of buffer
against potential claims to the contrary. Members would frequently comment on the certificate,
suggesting that the path was now free of obstacles, as though an end-point had been reached.
David Graeber has argued that bureaucratic regulation ‘ultimately depends on the threat of
violence’ (2006: 5). But how is this altered when the responsibility for bureaucratic processes is
intentionally moved from the state and placed on popular organisations? In this instance, failure to
conform does not risk the threat of violent coercion, but rather the threat of indifference and
exclusion from the material benefits offered by the standardised and bureaucratised mainstream:
the government simply withdraws money, having removed the onus of care away from itself.
Perhaps, though, either way results in compliance. Continuing my conversation with Alson – the
man who had confronted Mr Zondi in the meeting – he explained why he thought that the bank was
nevertheless a positive thing despite his complaints, and why he would continue to attend
meetings. He told me that several years ago, certain farmers in Makathini area had borrowed
money from Ithala bank. But they ate all the money they received, and subsequently failed to pay
off their debt. This is the reason why farmers from Makathini now find it difficult to borrow from
banks, he told me. Ithala refuses to give a loan to a person from Makathini. He continued:
Now that we have our own bank the government will pay the money directly to us.
Because it is the government who is paying us, if there is someone who has borrowed
from Simunye and won’t pay back, they will put that person in jail. This money is ours
to share. If someone fails to pay, they must go to jail. Ithala refuses to give us money
because of what those previous people did. Ithala learned their lesson from those
people, and don’t want the problem repeated. But with the government, that person will
pay by going to jail.
This statement expresses a strong feeling of communal, social exclusion from the mainstream
financial sector. The direct and tangible, physical force perceived to be carried out upon specific
individuals by the state is seen as preferable to the generalised exclusion resulting from freemarket conditions. This comment also throws light on the competitive access to resources belied
by the bank’s name – ‘we are one’.
7
An important question that emerges is whether, and in what ways, these perceptions and
expectations influence people’s actual behaviour: their financial investment in the bank or other
kinds of economic activity. From conversations with individual members, it became apparent that a
person’s intention to invest money in the bank depended upon two factors. The first was a
willingness to invest trust in the processes of standardisation. While some had developed a
negative impression of board members and of Mr Zondi, partly driven by rumours of corruption,
others were more hesitant in making any judgements of this kind and, instead, expressed
uncertainty or ambivalence. When asked whether they would begin to invest the R50 a month that
had been agreed upon in the April meeting, most said they would wait to see what happened, or
that they hoped the bank would become more established, better functioning, or more conveniently
located in town. The classificatory grouping of this organisation alongside existing financial
institutions under the category of ‘bank’ generated continual comparison that, as described above,
often produced either mockery or unrealistic expectation. One woman told me, for example, that
she would only begin to invest in Simunye when it was located in Jozini like the other banks, and
when she was issued with a bank card with which to withdraw her money. Thus, perceived
proximity of the bank to the formal sphere was an important element, but was an image under
continual threat. The fact that Simunye currently stored all its money in an ABSA bank account,
and that members must go to ABSA in order to invest money into Simunye, confused matters
further; Simunye is contained within, and dependent upon, the formal financial sector, at the same
time as being outside of it, and struggling to penetrate. When I asked one member whether she
would follow Mr Zondi’s advice and move money from other bank accounts to Simunye, she
argued that this didn’t make sense given that all of Simunye’s money was held in an ABSA
account. Attempts by Mr Zondi and other board members to generate loyalty for Simunye seemed
at times undermined by this. This highlighted, once again, the tension between Simunye’s attempts
at creating an ideological alternative to mainstream banking, at the same time as being ultimately
dependent upon it. Some attempt to critique the hegemonic role of formal banking was evident in
repeated jokes about wanting Simunye to be bigger and better even than ABSA, but ironically
recognised the impossibility of this.
The second factor that determined people’s willingness to invest in the bank had to do with the
personal level of risk involved in doing so. This perceived risk was invariably linked to an
individual’s current financial situation, their level of indebtedness and the existing options available
to them, both in the short and long term. Three individual accounts will demonstrate this. I begin
with Alson, who has already appeared in the account above for having criticised Mr Zondi during
the meeting.
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Alson
Alson began farming a year ago, because he was unable to find any other kind of job. He managed
to acquire the land by collaborating with several others who were in a similar situation. They all
shared the same area of land, but each grew separately on different plots. Alson sold his produce
locally at a roadside or by going from house to house. He has funded his farming by borrowing
from a mashonisa, which charges high rates of interest (R40 a month for every R100 borrowed).3
As a result it has been difficult to get any returns from the farming yet. He is careful only to use this
one mashonisa because of the risk of becoming too indebted. He describes his farming as only just
above ground financially, and he sometimes has to ask his neighbours for seeds when he cannot
afford them. He supplements his income by collecting old iron and other pieces of metal (one of
which he was holding in his hand as we talked, having just spotted it at the side of the road) and
takes them to the scrap yard, where he is paid for each piece according to its weight. Alson joined
Simunye because he wanted to receive a loan in order to buy good quality seeds – ‘professional
seeds’ as he called them – that would prevent crops from rotting or being eaten by insects.4 As his
earlier comments indicated, he had become very disillusioned with the board members of the bank,
accusing them of failing to take into account his situation. How could he pay R50 a month, he
asked, when all of his money had to go to his children, back into farming or returned to the
mashonisa? This lack of empathy, often a feature of institutionalised arrangements relying on
bureaucratic ordering (Graeber 2006), has influenced a perception of the bank’s detachment from
its members, and of it really belonging to Mr Zondi rather than to them: ‘He’s only helping the bank,
by borrowing money from other banks and people, but he’s not helping the people who started it.’
The example of Alson highlights the potential challenges of a performance-based loaning system,
that runs the risk of excluding the poorest members. Alson’s incapacity to invest in the bank will
prevent him from accessing its benefits. The lack of choice available to him has made him more
suspicious of the bank and those perceived to control it.
Ntanzi
Ntanzi has been a cotton farmer in Makathini since 1994. About three years ago, the cotton factory
in Makathini that had previously processed much of the cotton produced in the area was closed
down. It had been funded by the Land Bank who decided to close it, she told me, because of the
failure of farmers to repay loans. As a result, Ntanzi had to begin sending her cotton by truck to a
town in southern Limpopo, some 500 kilometres away. The additional transport costs and added
time-lag have put considerable strain on the profitability of cotton farming in the area, and upon
3
A mashonisa is a local money-lender, that consists either of an individual but more frequently of a group of people
organised in the form of a stokvel or saving club. Alson is borrowing from a stokvel.
4
Genetically-modified seeds are used widely in the Makathini area. These are also partly responsible for the different
standards of produce, and the competitive disadvantage experienced by very small-scale farmers such as Alson.
9
Ntanzi’s own financial stability. Ntanzi must supplement her income by making and selling
traditional straw mats called amacansi. This is a good way to make money, she tells me, because
amacansi are in high demand. Sometimes people come and ask for them even when she has none
available. At the moment she is rushing to complete an order for 30 amacansi. One reason why
they are in such high demand is that they are usually used as gifts at weddings. It is sometimes
difficult to find the money to buy the grass, because she uses different types which are often more
expensive. Her son, who has a temporary job in Johannesburg, sometimes assists her financially
with this. She also borrows small amounts from mashonisas when necessary.
In addition to this, she has received training in home-based care. She has been doing home-based
care for several years now, visiting people in the area where she lives to assist them with medical
treatment and general hygiene and health. Until about three years ago, she was receiving R500
per month from the government for her home-based care work. Since then she has received
nothing, but she continues the work because she recognises a widespread need for it. Further to
this, she is working voluntarily for Simunye, writing the minutes at meetings and carrying out
administrative tasks. She will continue this for as long as necessary or until they employ an
administrative clerk. The board is reluctant to employ her, she said, because she does not have
computer skills. She told me that she will soon begin to pay the R50 per month that was decided at
the April meeting: ‘I will save in Simunye bank because that’s how we’re going to help the bank to
succeed. We mustn’t start a bank and then fail to use it.’ She continued, explaining why people
needed Simunye. It is impossible to get a loan from normal banks if you do not have a job, she
explained, because they ask to see your pay slip: ‘Even if I tell them I am selling these amacansi
they do not believe me’. As in case of Alson’s suggestion that banks do not lend to people in
Makathini because of the failure of some individuals to pay back, this comment similarly implies
that mistrust on the part of banks is the primary reason for their unwillingness to provide loans.
I asked how she would afford to pay this regular investment of R50 to Simunye. She replied that
she could do so easily from the money she makes from selling amacansi. She explained that she
sold each one for R60 or R70. If she takes them to Jozini and sells them there, she can make
R100 from each one. If she receives a loan from Simunye, she would like to start growing
vegetables, and will continue to make and sell amacansi at the same time. Thus, for Ntanzi, R50
represented a more feasible investment than it did for Alson. Ntanzi’s account shows how a more
reliable income source may influence her willingness to trust the bank. Trust and risk are inversely
correlated. Ironically, although micro finance is intended to support those who do not have other
income sources, some ability to generate cash informally is likely to reduce the risks involved in
investing in institutions of micro finance, and therefore to enhance trust in the entire process of
formalisation. In this respect, the formal and the informal are mutually constituted.
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Thami
Thami is a 26 year old aspiring farmer. He lives in the village of Nkangala, which is a 45 minute
drive from the area of Makathini where he intends to start farming. Despite having no regular
income and currently living off his mother’s pension, he is determined to establish a farming
business. He wants not only to make a living through farming, but has dreams of becoming rich,
extending his business overseas and, one hope that he cherishes in particular, to build his mother
a huge house.
Thami completed his matriculation (school leaving certificate) in 2005 with excellent results and
fluency in English. He moved to the town of Port Shepstone, south of Durban, where his sister’s
partner secured him a job working for a delivery company. He found the work boring, and came
home after six months when his brother informed him that a temporary teaching post in English
and History had become available at his former school. He applied and got the position. He worked
there for a year and a half until his contract expired at the end of 2007. At this point, he decided to
follow his childhood ambition of farming. He got a job in the nearby town of Mkuze in the bottle
store while trying to accumulate information about starting a business, travelling to various places
to meet government advisors and to visit banks in search of a loan. The first year was a steep
learning curve, and he discovered that the process was more complex than he had realised. He
mocked his earlier naivety, saying that he had initially imagined that getting a loan would be
straightforward:
At the start I didn’t know a single thing! I thought I would go to a bank myself and then
tell them with my own utterances. I said to myself, “I have to tell them confidently, so
that maybe they will give me that capital that I want”. I planned that I would say, “I’m
having this career that I am glowing about! So I am requesting R500,000 from you”. I
thought that they would respond by saying, “Oh, are you sure about that career?” I
would respond by saying, “More than sure!” And I thought that that would be the only
thing they would be looking for from me. After that, I thought that they would ask for my
account number, then I will give it to them. Then I will get the money! I said to myself,
“It will be as easy as that”, while I didn’t know!
Ending in a more serious tone, he paused, and added thoughtfully: ‘So I learnt many things on the
road.’
It took several months before he had a clear sense of what was required. In 2009, after contacting
many companies and agencies in search of advice, he eventually started to write a business plan,
with the help of the owner of a beer distribution company, who he met in the Jehovah’s Witness
congregation to which he belonged. He is still in the process of completing this business plan and
is in negotiations with a branch of Ithala bank in Empangeni, a town located 200 kilometres to the
11
south, about securing a loan. It was a long process to find the right person with whom to speak at
Ithala who would be able to help. Finally, he identified someone who was willing to assist him, and
this person informed Thami that in order to access the loan, he must submit his completed
business proposal and a copy of the lease for the land he will use. In addition, he was advised by
the government advisor in nearby Jozini, that he should form a cooperative, suggesting that sole
traders found it much more difficult to access loans that cooperatives. He also needed to apply for
a CK form which would signify that the business is officially recognised and incorporated.5 He
formed the cooperative, which consists of four members, and applied for the CK, which he finally
received on 26th March 2010. With this he was able to open a business account and also
negotiated with various farmers to hire a plot of land. On the 8th May 2010, he took his CK to the
South African Revenues Service to register for tax payments, a process required in order to
validate the CK form. He explained to me the importance of the CK form:
This CK is everything... It’s an official document for everyone to start a business with. It
means that the business is formal not informal. As I told you, my business name has
been successful, which means that there is no-one else who can use these words or
this title in order to establish his or her own company: because it is already worldwide.
It is in the internet right now. They know that in South Africa right now there exists a
businessman whose company is Ngwane Family Agricultural Trading.
Thami has also used this form in order to join the government database for tender contracts. Short
term contracts known as tenders are an increasingly common form of income for many people, in
the absence of more permanent employment. Thami often emphasised that he wants to have
several income raising options, rather than to invest all his energies into one. Another incentive for
joining the tender database, he pointed out, was that farming required significant input capital, and
that unexpected scenarios often arose in farming that require financial resources.
I asked Thami whether he was confident that he will get the loan from Ithala Bank. ‘Very confident,’
he replied without hesitation, ‘I feel sure.’ Part of his confidence was due to his friend who was
assisting him with the business plan. He trusted his friend’s competence and felt sure that his
business plan would be excellent. He continued:
This farming career I view as already existing. I am viewing it as something
accomplished, because I will complete it soon, so I am looking for other careers that
will [arise out of] this farming. As soon as I start this farming career, I want to start
something else. I told you, I want to construct a market.
He went on to describe various ideas and plans that he had for expanding his business.
5
The CK is an official document issued by the Companies and Intellectual Property Registration Office, of the
Department of Trade and Industry, whose slogan - ‘gateway to formal economic participation’ - aptly summarizes its
role. See the website: http://www.cipro.gov.za
12
Without any source of income, current employment or savings, I asked Thami how he managed to
pay for the CK form, which cost him R750. He laughed, rather embarrassedly, clearly reluctant to
tell me. He added that he would tell me one day. After a minute of humorous exchange during
which I attempted to guess, he said ‘No, I can tell you it. I was selling wood. I used to collect the
wood into big bundles and sell it for R150 each.’ He explained that it was very hard work, because
he was doing it alone. I asked if it was a good way to make cash. It made good cash, he told me,
because people even came to his house to collect it. They brought their cars and collected it, and
took it away. People would even phone him to order the wood, and then they would collect it. He
sold it at his house because these were huge bundles. You couldn’t just carry them, you needed
transport. He explained it was extremely hard work, because he had to carry each of the logs
alone, up the mountainside and all the way to his home. ‘I sweated for this CK!’ he repeatedly told
me. I asked him why he didn’t want to tell me about it at first. He laughed, saying ‘Ah, it’s snuk’s
work’, making a dismissive gesture with his hand. I asked him what ‘snuk’ meant. He said it was a
colloquial term for useless, low or stupid. ‘The work is just basic’, he added, searching for the right
words, ‘just labour’.
Thami joined Simunye Community Bank during 2009, after hearing about it from his cousin. He
joined it in order to receive a loan, but he knew that this was unlikely for some time: it existed as
just one of several options for him. Also, he needed a substantial loan, more than Simunye was
likely to provide. ‘All in all’, he said, ‘I am not expecting much from this bank. It is still early.’
Hopefully one day, he suggested, it would become useful to him.
Thami’s story usefully pinpoints several ideas that are central to this paper. Firstly, it demonstrates
the complicated and time-consuming process involved in establishing and funding an accredited
business. Time, money, contacts and competence in written and spoken English are all necessary
attributes. Self-confidence, risk-taking and, on a more pragmatic level, a lack of dependents, also
seem indispensable to Thami’s looming success in starting a farming business. For Thami, the
Simunye Bank is merely one of a number of options. His approach to acquiring funds was
significantly more proactive than that of anyone else with whom I spoke. Multiplicity of options was
clearly central to his strategy. Like Ntanzi, he was unwilling to throw all of his eggs into one basket,
and entering into a process of formalisation did not relinquish his engagement in popular
economies. Indeed, given the expensive administrative and transport costs, the process of
formalisation actually generated such activities: what he pejoratively referred to as ‘snuk’s work’.
This comment, as well as his general embarrassment about explaining that he made money from
collecting and selling wood, indicated that he viewed such pursuits as subordinate – despite their
extremely lucrative potential – devoid of the status associations attached to business ownership.
13
Formalisation was, in many ways, desirable. Thami’s story shows this most clearly, his derogative
reference to ‘snuk’s work’ exposing the different statuses attached to formal and informal activity.
For Ntanzi, this hierarchy of jobs was not as apparent: she enjoyed making amacansi, finding it a
skilful, creative and lucrative activity. Thami’s mocking of his earlier naivety suggests an eagerness
to enter the esoteric and official realm of formal-sector business. Both Ntanzi’s and Thami’s
accounts indicate the various kinds of economic activities that can spring up in the fissures of
official, bureaucratic or formal processes that, especially in Ntanzi’s case, may even subsidise the
latter. Both her voluntary work at Simunye and her home-based care fulfil are jobs which are
unpaid, and subsequently subsidise other areas of the economy, the responsibility for which the
government has failed to take on.
These examples belie the linearity implied in the notion of ‘formalisation’ and suggest both that
people are likely to continue to engage in a multiplicity of different kinds of activities, and that the
official realm gives rise to various kinds of income-generating activities that are not factored into,
nor predicted by, the visible trajectories of incorporation or formalisation. As I suggested earlier
with reference to the Simunye Community Bank, this is not only the case with individuals but with
organisations, as processes of institutionalization may themselves give rise to a host of
contingencies and threats to intended standardised procedure, such as the threat of corruption.
These, furthermore, may be necessary or intrinsic to an institution, rather than peripheral. What is
clear is that expectations are strongly influenced by a perceived trajectory of formalization. I turn to
a second example of a different kind of institution about which this is not the case. It is intended,
however, only as loosely comparative given its very different roles and structure compared to those
of Simunye. Given that I discovered the club shortly before leaving South Africa, the next section is
only a preliminary sketch.
Ubumbano Club
Ubumbano (‘unity’) Club was set up in 2002 by a radio presenter at the local station ‘Maputaland
Radio’. It was initially started as a burial society, but has escalated to include a number of different
money-saving and money-generating activities. It is unlike any other club of its type that I have
encountered because of its rapid growth and apparent success. The club began in the Jozini area,
mentioned above, but now has members located as far away as Durban, 350 kilometres to the
south. It contains nearly 150 separate groups, each with between 50 and 150 members. Groups
are organised according to geographical region, and are themselves split into several local
14
branches. The whole thing is coordinated from a central office in Jozini which employs two full-time
secretaries.
Members pay a R100 joining fee which is repayable after a year. Each member must fill in a form
which is subsequently kept in the central office, specifying their own details and including the name
of 6 ‘beneficiaries’, members of their family who are entitled to benefit from the scheme. Each
member is issued with a membership card and policy number. The central purpose of the club is to
support members when big events arise, such as weddings, funerals and coming-of-age
ceremonies for daughters, as well as, less commonly, to fund tertiary education or to assist minor
business enterprise, for example to help musicians to record albums. Following the death of a
member, or a beneficiary associated with a member, everyone in the group is expected to give
R30 towards the cost of the funeral. This money is divided into three categories: R10 is for the
‘envelope’, a donation that is offered to the family prior to the meeting; R10 goes towards the cost
of a blanket which is taken to the funeral as a gift; and the final R10 is for the ‘dish’, a monetary gift
offered to the family during the funeral itself. Members of the branch in which the funeral is taking
place will generally agree to put in a higher amount each – usually R100. Payment of this R30, as
well as attendance at the funeral itself, is expected and encouraged, but not compulsory. In an
openly-spoken about manner synonymous with wider social expectations around funeral practice,
failure to pay tends to result in reduced reciprocity. Due to the size of the groups, the recipient
receives a considerable sum; this can be amounts of up to R10,000. Each branch has a committee
responsible for collecting and managing money, and has its own bank account. In addition, all the
financial procedures at the branches are documented and submitted to the office.
The club has expanded to include a number of other practices as well, which have all been initiated
by the founder and chairperson of the club, known by his nickname of Ntoyabantu (‘for
everyone’/’at the service of everyone’). Firstly, each group is in the process of organising a
community bank as part of the same SAMAF initiative as the Simunye Bank. As in the case of
Simunye, this will enable members to take out loans to develop small businesses. Secondly, a
scheme is available for individual members who, if they decide to participate, are assisted by
Ntoyabantu or another central committee member in opening a personal account at ABSA into
which they pay R20 each month. Despite being a personal account, held in the name of the
individual, it is seen by members as linked to Ubumbano. If, at the end of the year, a person
wishes to withdraw their money, they are supposed to ask member of the Ubumbano board to
assist them in doing so. Thirdly, functions are held in which members of government and business
advisors are invited to offer advice on starting businesses. At the recent function in May held in
Jozini, representatives of South African Football Association were invited to advise members about
how to generate income from the influx of tourists expected in South Africa during the World Cup in
15
June. Fourthly, at a recent branch meeting I attended, the chairperson announced a new ‘game’
introduced by Ntoyabantu. Members who wished to participate would organise into small groups of
three or four. Each group would contribute an agreed amount to a pot, and a group name would be
drawn from the pot. This group would receive the full contents of the pot. Finally a ‘donation
scheme’ called the ‘Ntoyabantu Trust’ has been set up for members to provide money and other
items such as food which will be offered to Ntoyabantu as gifts.
An important question that emerges is: what accounts for the apparent rapid success of the
Ubumbano Club? One reason for the popularity of Ubumbano club among its members is the
charismatic leadership of Ntoyabantu. He is well-known by all the members, and makes a regular
appearance at events. He tries to attend as many personal events as he can, such as funerals,
and often attends group meetings. If a new branch opens up, he is always in attendance. I met him
first at the Ubumbano office in Jozini, where he greeted me with a strong handshake and
embarked on an animated description of the club, why he had set it up and how it was helping
people. He looked young, perhaps in his mid-30s, and wore a stylish leather jacket.
Ubumbano, he told me, was based on values of mutual love and inclusiveness. No-one was
prevented from joining. He had designed it in such a way that even the poorest people could
become members. He was motivated to set up the project when he attended a funeral in the
nearby area, and was moved by what he saw: the deceased was buried wrapped in a blanket,
because the family could not afford the cheapest coffin. There was no food to feed the guests. He
decided that he had to find a way to help people, he told me, ‘so that this could not happen again’.
I have heard this tale told by members, which suggests that it was a story repeated by Ntoyabantu
to his members. As this story and others suggest, Ntoyabantu’s commentary about Ubumbano
engages explicitly with a wider social context of poverty, unemployment and illness, addressing the
anxieties that pervade it with a depoliticized discourse based on ideas of mutual love and support.
He said:
We promote people to love each other. We have this problem of HIV/Aids and it causes
people to get stressed, but as a member, you’ve got motivation, and that means that
you can live longer… Others are busy criticising, but we are doing something positive.
Unlike in politics or the church, he told me, Ubumbano is completely inclusive. Anyone can join,
and its purpose is to create unity rather than to divide people. Ubumbano nevertheless makes use
of popular idioms associated both with political and religious movements. Meetings always begin
and end with the political slogan, ‘viva Ubumbano, viva!’ Members wear a red and white uniform to
large meetings and to all events and functions funded by Ubumbano, that evokes the uniforms
16
associated with churches. These practices create layers of meaning drawn from various
associations and shared experiences. Another example is the giving of a blanket as a gift at
weddings, which is an established and well-known practice in the area. This generates social
relations of reciprocation more powerfully than simply exchanging money, as others have shown
(e.g. Bloch & Parry 1989). Other practices tie the group together and create a layer of esoteric
meaning, such as the nickname each member chooses for themselves. Examples from the branch
of Mphakathi which I have attended include Buqilibezwe (‘this lying world’), Ayikho inkinga (‘no
problem’), Mapatanisa (‘struggling’), Ukhuni (‘firewood’) and Spesheli (taken from the English –
‘special’).
Part of the popularity of Ntoyabantu has to do with his existing status as a popular radio DJ. Many
people knew him already, from listening to the radio. A story that I have heard circulating is that
Ntoyabantu left his job at Maputaland Radio because his colleagues were jealous of his success at
Ubumbano; a resentment which eventually forced him out of the job. I do not know whether this is
a story that Ntoyabantu himself told to people or whether it is a rumour that had started elsewhere.
When speaking to Ntoyabantu, he told me that he had left Maputaland because the club was
taking up all of his time and he no longer had time to work on the radio. What seems clear, either
way, is that this story – one of sacrifice and victimhood – often enhances members’ admiration of
Ntoyabantu, and was offered by several members as a motivating factor for them giving money to
the ‘Ntoyabantu Trust’. Branches decide separately what they will each give. Mphakathi branch
gives R5 a month per member.
A further reason for the success of Ubumbano is the access that Ntoyabantu has to various media
sources. Initially advertising the club on Maputaland radio station, the club has now linked up with
Ukhozi FM, the biggest Zulu-speaking radio station in the country, and aired across the whole
province of KwaZulu-Natal. Ntoyabantu told me that he was arranging a programme with the
station so that members can phone in and share ideas and concerns, and announcements can be
made. They are also in the process of setting up a website. This is the last job, he says, before the
club will be fully and successfully launched.
As Erik Bähre (2007) points out, far from being the havens of support, harmony and friendship that
financial mutuals often appear to be at first sight, they tend to be shot through with tension, conflict,
even the threat of violence. If these aspects of conflict have emerged more from my description of
Simunye bank than those of Ubumbano, this may well be because I have only recently begun
research about the latter. Despite this, I have already encountered frustrations by members
because others are failing to pay. In one branch, the chair feels compelled to pay for others’
contributions in order to maintain the standing of the branch vis-à-vis other branches. On a more
17
subtle level, mocking and humiliation are used in meetings in order to pressurize members to pay
up. Moreover, strategies appear to be loosely in place for when one branch holds more events
than the others, such as members informally boycotting the event.
Discussion
Ubumbano is a form of social organisation which manipulates multiple flows of cash. Unlike many
financial mutuals, it carries out several different functions, overlapping in terms of how they are
organised and in terms of the people that participate, yet distinct because they involve separate
circulations of cash and operate according to different rules. Individuals and branches engage in
strategies to determine how to manage these separate flows and which to prioritize. At the recent
Mphakathi branch meeting that I attended, held in a shaded clearing behind a tuckshop in the
village of Nkangala, four separate collections were taking place. These were represented by four
separate columns on the paper that the chairperson was using to document each person’s
contribution. The first column was a collection of R20 from each member for the upcoming annual
function to be held in Jozini. The second column was a collection of R5 for the ‘Ntoyabantu Trust’.
The third column was a collection of R30 for an impending wedding at the nearby branch of
KwaQondile. Finally, the fourth column, entitled ‘inja yezidumo’ (‘police dog’) was a collection of
R30 for a general monthly kitty to be used at a later date at the discretion of the branch members.
For those members who could not afford all four payments, the first two columns were prioritized
because of the approaching events for which they were intended. These were also the two
collections that were determined by the central committee, and would define the status of the
Mphakathi branch within the wider organisation: its relationship to the central office and to
surrounding branches of its group. For these reasons, these two collections were given priority
over the others.
In this respect, the wedding collection was part of a circulation of money that linked several
branches together within an ongoing system of reciprocation. Inja yezidumo represented the flow
of cash from individuals into the branch, and was important for demonstrating commitment to the
immediate group. The Ntoyabantu Trust was yet another flow of cash from the branch to the
founding member. This was extremely significant. Far from members feeling suspicious about the
economic gains made by a man who left his job to work exclusively in the club, members
celebrated his role and appeared to invest complete trust in him, to the extent that they would offer
regular financial gifts to support him. Motivations for this had partly to do with the image of
Ntoyabantu as a victim, pushed out of his job by his former colleagues. Perhaps, in a subtle way,
this regular offering of cash expressed a kind of recognition of his trust in Ubumbano – his
18
willingness to depart from formal sector employment altogether – and their endorsement of their
own organisation vis-à-vis formal sector employment. His financial gain within the club seemed to
symbolise the possibility of gain that the club offered to everyone even if, in reality, this was
unlikely to take place for most members. There is also the possibility that certain members felt
pressured to pay the agreed amount of R5 to the Ntoyabantu Trust, even though they did not want
to. I will have to do more research to know whether this was the case, but those members with
whom I did speak, seemed always to speak enthusiastically and appreciatively about what
Ntoyabantu was doing for them.
One of Ntoyabantu’s roles, and that of the club as a whole, was to assist people in engaging more
effectively within mainstream economic practice, whether this meant helping them to open a
savings account at ABSA or providing them with access to SAMAF-funded micro finance. But it
seems as though these activities, rather than being the central purpose – ‘processes’ moving
towards a fixed end-point – were relatively peripheral to the main system of monetary circulation
between families and branches. Ntoyabantu achieved his success by managing these flows
between the formal and informal, and by developing means of engaging effectively with both of
these. Members of Simunye bank on the other hand, perceived the process as a more linear one,
with accreditation symbolising a milestone in the progression of the bank towards its full status as a
participator within the formal economy. Questions as to whether or not this could, in fact, be
achieved emerged continuously in the justifications, criticisms, jokes and hopes of members. What
became apparent when speaking to members of both organisations was the multiplicity of
economic activities individuals engaged in, that tends to be obscured by state-driven, normative
expectations associated with the idea of formalisation.
.
References
Bähre, E. 2007. Money and Violence: South African Self-Help Groups in a South African Township.
Bloch & Parry. 1989. Money and the Morality of Exchange
Graeber, D. 2006. ‘Beyond Power/Knowledge an exploration of the relation of power, ignorance
and stupidity’
Guyer, J.I. 2004. Marginal Gains: Monetary Transactions in Atlantic Africa. Chicago: University of
Chicago Press.
Hart, K. 1999. The Memory Bank: Money in an Unequal World. London: Profile Books.
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