Women’s co-op aims to shake up dominance of SA’s biggest banks
BUSINESS LIVE / 15 JUNE 2018 - 07:41 / AGENCY STAFF
London —After more than a decade of SA’s biggest banks not having to face fresh competition, new rivals are stacking up.
The latest entrant, the Young Women in Business Network Cooperative Financial Institution (YWBN), is now seeking to become the country’s first bank owned by women by converting from being a co-operative institution, which can only offer services to its members, MD Nthabeleng Likotsi said.
It will target informal traders and black business owners who have been shunned by traditional lenders, she said.
YWBN joins at least three other companies planning to challenge the nation’s five top lenders, including FirstRand and Standard Bank Group.
Between them, those five major banks control more than 90% of banking assets and dominate the local landscape, with ATMs and branches littered all over the country, offering everything from savings accounts and credit cards to business loans and private wealth management services.
"Competition is healthy and we strongly believe this country needs to have more banks," Likotsi said.
"Banks don’t understand black entrepreneurs. Power is sitting in the informal sector, which has not been fully activated, and banks are not giving it their full attention."
YWBN is hoping to set itself apart by targeting individuals who fall outside of the formal economy, such as self-employed hawkers and minibus taxi drivers, as well as stokvel savings pools, said Likotsi.
"If I want to raise a million quickly I can go to a million South Africans and ask them to each contribute," she said. "That is the power. The power is sitting in the stokvels, the power is sitting in the hawkers, the power is sitting in the taxi drivers. We believe in that informal sector."
The company will submit its licence application on Friday by marching from the Presidency’s offices at the Union Buildings in Pretoria to the South African Reserve Bank’s offices in a bid to raise awareness of the need to accelerate black economic empowerment, she said.
It is seeking to convert into a mutual bank, which can take money from depositors, who then become members with voting rights in the company.
Likotsi said that 60% of the co-operative financial institution’s members were black women and the co-operative had 550 shareholders with R40m in shared capital.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER