Nthabeleng Likotsi is resolute. The 33-year-old — who on Friday was joined by about 100 women in marching to the Reserve Bank — believes there is ample room for a women-owned mutual bank to serve the black market.
"There is a gap for banks that understand black entrepreneurs in particular, because the culture and behaviour is completely different. We know the challenges, this is what we live and breathe every day," Likotsi, who grew up in an entrepreneurial family in the Free State, told Business Day.
No stranger to new business initiatives, she founded the Young Women in Business Network (YWBN) in 2009 to facilitate women empowerment.
Friday’s march from the Union Buildings was aimed at raising awareness of the need to accelerate transformation and financial freedom. "The conversation must carry on. Legislation still has to be changed … at least now the doors are opened," she says.
YWBN’s path to becoming a mutual bank, which took a major step when it submitted its licence application on Friday, began in December 2015, when it became a co-operative financial institution — an umbrella term for deposit-taking co-operatives owned and controlled by members.
"Co-operative banks are like stokvels, which was something I understood very well," says Likotsi. Her wish was to use the stokvel model, which is most often used for short-term purposes such as buying groceries, to create wealth.
Treasury estimates that stokvels attract nearly R50bn in member contributions annually.
YWBN has already enjoyed success in this regard, funding more than 27 black-owned businesses, some with loans as large as R360,000.
But it has been limited by its membership requirements, which include a once-off R10,000 share capital contribution, an annual membership fee of R500 and a monthly savings contribution of R1,000 for five years.
The mutual bank licence, says Likotsi, will enable it to open its doors much wider.
Already, YWBN has more than R40m in capital and 550 shareholders. An as yet unnamed investor will inject further capital into the business, says Likotsi. "We want to keep it 60% black women owned."
Likotsi and YWBN will have their work cut out for them in an increasingly competitive banking space. If it is successful in obtaining its licence, it will become one of SA’s first new mutual banks since 2012.
The other new entrant is the Michael Jordaan-backed Bank Zero, which is to be 45% black-owned.
Bank Zero and YWBN are joining a growing list of newly launched or soon-to-be launched banks in SA, which includes TymeDigital, Discovery Bank and Postbank.
Postbank is also keen to reach the informal and rural market with talk of innovative credit models.
So how is YWBN different? "For now, we are positioning ourselves as the bank to go to for enterprise funding. We will then open up gradually to retail customers, focusing on domestic workers, hawkers and taxi drivers," says Likotsi.
Its value proposition will extend beyond funding, to mentorship and assistance of entrepreneurs. It will initially use digital channels, with plans to roll out branches.
If all goes to plan, YWBN may well give Postbank a run for its money.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.