Franc, a new stokvel app, claims to be SA’s cheapest way to invest
Thomas Brennan, the former head of digital innovation at Discovery Health, says he has launched SA’s lowest-cost investment platform.
Franc, a smartphone app, would allow stokvel members to invest in money market and exchange-traded funds (ETFs) for R5 a month, the company said on Wednesday.
Like stocks, ETFs are listed on the JSE, but they track an index such as the Top 40, or a commodity, bonds or a basket of assets.
Access to Franc is free for the first six months and there is no minimum investment amount.
"You can withdraw or transfer your money anytime without penalty and there are no hidden or complicated fees," the company’s statement said.
Franc, a member of Rand Merchant Investment Holdings’ fintech investment arm, launches at a feverish time for financial technology companies.
A number of these are seeking to lower costs and improve access to financial services products.
"SA has one of the lowest savings rates in the world. For the vast majority of South Africans, accessing investment opportunities is expensive and difficult," Brennan said.
"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."
Franc’s two investment options are the Allan Gray money market fund and Satrix 40, which tracks the performance of the 40 largest companies listed on the JSE.
"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," said Brennan.
Money market funds track the trade in short-term loans between banks and other financial institutions. The Satrix 40 ETF tracks the JSE’s top 40 index.
Since Franc is a stokvel, users must be invited to join. By signing up to the app, Franc will match you with someone you know.
The Franc team consists of eight professionals who have backgrounds in machine learning, software development, smart contracts, compliance, legal, investment and actuarial science, the company said.