It is 6 am in the morning in the middle of nowhere, my uncles have been standing outside my fiancee’s gate for a good 3 hours. They have made so many attempts to reach out to her family to no avail. The sun is scorching hot and the sweat is running down the side of their cheeks. They are dressed in their 1980’s Carducci jacket, Brentwood trousers, Crockett and Jones shoes and Italian fedora hats.
Their intentions are clear. Today is the day they go and find me a wife. They are all highly experienced at this game as they have successfully negotiated proceedings for many of my brothers that have gone before me. There is one problem that I am weary off, I am Tswana speaking and my wife’s family is Zulu speaking from the heart of Ulundi, KZN. The last time my uncle couldn’t pronounce “indololwane” at the local taxi rank we almost got into big trouble.
However, I am comforted by the presence of my High school Mathematics teacher and chief negotiator o Bab’ Vilakazi who has married off three of his daughters and is able to speak the language fluently. I communicated to them beforehand that it took me a long time to save up the money as the funds were deposited into a current account with my local and trusted bank. I would have loved to have paid the dowry earlier but I did not really diversify my investments and ultimately put all my eggs in one basket.
The big elephant in the room? How are people investing or saving for Lobola?
Ilobolo is a Zulu term that means a payment that is made by the man’s family to the woman’s family to build relationships between the two as marriage is seen to be more than a union between two individuals. Whilst this holds a sense of pride for many African men, there is no silver bullet for saving for Ilobolo.
Whilst majority of young men invest in traditional bank products that offer fixed interest rates over the short term, prudent young men employ a mixture of investments to diversify their portfolio. An example of a diversified portfolio includes investments in Tax Free Savings Accounts, Unit Trusts, Money Market Accounts and Stokvels.
For investors who are a lot more risk seeking and want to receive double digit returns, SV Capital’s Lobola Fund could be an option. Founders Kagiso Tloubatla and Ayanda Majola have piloted an investment fund that investments a minimum of R 500 in a herd of cattle. The founders have claimed that the fund has averaged 18.2% return over the last 3 years. According to Kagiso, demand for beef is on the rise and with the lack of supply in the South African market, investing in cattle could yield fantastic returns.
Given the outbreak of the foot and mouth disease in recent times, is it really wise to invest in cattle? Tloubatla has argued that beef prices have remained fairly stable over the last 10 years regardless of the outbreak of the disease.
In the context of competitors, Tloubatla has argued their product differs from the already established Livestock Wealth app. SV Capital does not own any farms and the cattle is fed by feedlot and not grassfed. Furthermore, Tloubatla argues that SV Capital were the pioneers of fractional investing, owning a portion of the cattle.
SV Capital currently has 15 active investors mostly male in their 20’s and a small fraction of women. The investment risk is moderate and is attractive to investors who are looking to invest in products who offer more than just inflation beating returns.
South Africa’s current economic climate currently does not allow for investors to invest in products that are a lot more risky than zero rated bank accounts and bonds. The rhetoric is that consumers need to reduce debt and spend less. We are aware that if the stock market is not performing well, investors are likely to shift their funds to safer bank products.
However, this should not deter the risk seeking investor who is looking for innovation and higher returns. Saving for Ilobolo should be one of the most exciting times for a budding 20 – something year old African man. It is a sign of maturity and a coming of age. Historically, the man’s family would make payment in the form of cattle, it might just be comforting to get back to basics.