A new low cost investment app and platform has been launched in South Africa. Named Franc, it is inspired by the stokvel model - South Africa's popular way for a group of people to save and invest.
Franc, which is founded by Dr. Thomas Brennan who is the ex-head of digital innovation at Discovery Health, allows stokvel members access to the money market and an exchange traded fund via their mobile phones.
“We are excited about bringing Franc to SA consumers for the first time during Savings Month. 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," said Dr. Thomas Brennan, founder of Franc.
Franc is said to have no minimum investment amount and users can withdraw or transfer their money at any time without being charged penalty fees. Access to Franc is free for the first six months; thereafter the membership fee is R5 per month. Although members can get another six months free for every friend they invite who becomes a member in the first free six months.
Franc has two options for users to invest their money, namely the Allan Gray Money Market Fund, which has returned an average of 7.87% interest over the past year, and Satrix 40, an exchange traded fund (ETF) recently voted SA’s favourite ETF, that tracks the performance of the JSE Top 40 largest companies and grew 66.46% over the last five years, an average compound annual growth rate of 10.67%.
“Stokvel members simply choose how much they would like to invest, how often and how they would like to split their investment. They can choose between the lower-risk Allan Gray Money Market Fund or the higher risk Satrix 40 ETF, or a combination of the two,” added Brennan.
Franc is a member of AlphaCode, the FinTech investment arm of Rand Merchant Investment Holdings.Share this article via: