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Women-owned SA bank joins entrants tackling the big five

f2wohf

Honorary Master
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Apr 15, 2014
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14,700
#1
After more than a decade of South Africa’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, is now seeking to become the country’s first bank to be owned by women by converting from being a cooperative institution, which can only offer services to its members, Managing Director Nthabeleng Likotsi, 33, said by phone.

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 [JSE: FSR] and Standard Bank [JSE:SBK].

Between them, those 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."

Hot competition

After an 11-year absence of new commercial-banking licence applications, the regulator has approved two in the past year and one provisional licence: Discovery [JSE:DSY] plans to start a service within months aimed mostly at middle- to upper-income earners.

TymeDigital, backed by Commonwealth Bank of Australia and local billionaire Patrice Motsepe, will allow customers to access funds through mobile phones.

Bank Zero, co-founded by the former chief executive officer of FirstRand’s First National Bank, plans a digital offering that will encourage savings.

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 community-based savings pools known as stokvels, 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."

Black empowerment

The company will submit its licence application on Friday by marching from the presidency’s offices at the Union Buildings in Pretoria, to the 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.

More than 24 years after the end of racial segregation, South Africa’s board rooms are still dominated by white men, who also earn more, according to a study done by Statistics South Africa.

At least 60% of YWBN’s members are black women, while the cooperative has 550 shareholders with R40m in shared capital, Likotsi said.

YWBN will raise funding from two investors to boost its capital levels, she said, declining to identify them until the application is finalised.

The bank will initially be run from its base in Johannesburg using digital channels, before opening branches in other locations in its third year of operation, she said.
https://www.fin24.com/Companies/Fin...joins-entrants-tackling-the-big-five-20180614
 

f2wohf

Honorary Master
Joined
Apr 15, 2014
Messages
14,700
#7
Until now, I thought that my company's name was long (and annoying to type 12 times a day) but it pales in comparison of theirs:

Young Women in Business Network Cooperative Financial Institution
Eeeeeeeeeeeeeeeeeeeeeeeeeee
 

Johnatan56

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Joined
Aug 23, 2013
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20,767
#9
It will target informal traders and black business owners who have been shunned by traditional lenders, she said.
There's a reason they've been shunned. I'm expecting this bank to at most break even, it will probably just hemorrhage money.
 

diesel

Expert Member
Joined
Mar 4, 2007
Messages
2,051
#14
It will target informal traders and black business owners who have been shunned by traditional lenders, she said.
this sentiment is a good motivator to get government funding and support but i think using it as a business strategy she will learn the hard way why the rest have not.
 

konfab

Honorary Master
Joined
Jun 23, 2008
Messages
16,906
#16
It will target informal traders and black business owners who have been shunned by traditional lenders, she said.
Well it must obviously be because of racism and sexism. It cannot have anything to do with the things like the national credit act and willingness to actually make money.
 

ForceFate

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Joined
May 18, 2009
Messages
11,008
#18
Well it must obviously be because of racism and sexism. It cannot have anything to do with the things like the national credit act and willingness to actually make money.
They're nit claiming it has anything to do with racism now, do they? I listened to her radio interview few days ago.
 
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