30 January 2024
1. Breaking: Young Women in Business Network Cooperative Financial Institution (YWBN-CFI) is pleased to announce that it has been issued a license by the South African Reserve Bank’s Prudential Authority (PA) with concurrence from the Financial Sector Conduct Authority (FSCA) as legally required in terms of section 126 of the Financial Sector Regulations Act of 2017 to register a Mutual Bank in terms of section 14 of the Mutual Banks Act 124 of 1993. We are really excited and eagerly looking forward to establishing South Africa’s first female majority owned bank. Excited as we are of having achieved what to many appears to be an unconventional goal, we vie the success not as an endpoint but rather as milestone on an everlasting path of evolution to effecting transformative change in the local financial sector, leading to ability to bring prosperity for all, particularly the marginalised.
2. Flashback – The Journey: To those not in the know, the YWBN Journey to acquire a mutual banking licence might appear to have been ordinary. However, reality is that the journey was long, arduous, and onerous, and punctuated by the following key landmarks:
2.1 Formation of YWB CFI – The first iteration took place nine (9) years ago with the formation of
YWBN CFI, a deposit taking financial co-operative registered in December 2015 in terms of the CoOperatives Banks Act 40 of 2007. By 2018, the CFI had grown significantly, prompting a decision by members to register for a Mutual Banking license and thus expand service offering to a broader;
2.2 Submission of application to register for a Mutual Banking – On the 15th June 2018, YWBN CFI embarked on a march from the Union Building to the South African Reserve Bank (SARB) to submit an application to request authorisation to establish a Mutual Bank in terms of section 10 of the Mutual Banks Act 124 of 1993;
2.3 Compliance to Regulatory Provisions – The third iteration involved provision of reams and reams of business case and support documents to prove viability of market that the YWBN is targeting;
2.4 Authorisation for the establishment of a mutual bank – On 9 March 2021, YWBN CFI received authorisation from the PA with concurrence from the FSCA as legally required in terms of section 126 of the Financial Sector Regulations Act of 2017, for the establishment of a mutual bank, in terms of section 11(1) of the Mutual Banks Act;
2.5 Capital Raising (Own the Bank Share Scheme) – On 01 June 2021, YWBN issued a call to public to join its Network, particularly Historically Disadvantaged Individuals and Groupings (HDIGs) to own a piece of history through buying of shares in the “Own the Bank Share Scheme” to build a Mutual Bank of their own from the ground up. Despite the call made in the midst of Covid Pandemic, with lots of uncertainties about the future and running for a period of only one month, the scheme saw over 10 000 people join the Network’s common bond and subscribe to buying shares in the yet to be formed YWBN Mutual Bank. About R19 000 000.00 (nineteen million rands) in cash was raised, demonstrating public appetite for majority black women owned bank;
2.6 Refund of deposits – In July 2021, the Companies and Intellectual Property Commission (CIPC) issued a directive that YWBN violated Sec 99 of the Companies Act in relation to the Own the Bank Share Scheme and the YWBN CFI, and decreed that YWBN refund all capital raised within 21 business days, to which YWBN fully complied including effecting the remedials within the prescribed period; and
2.7 What they said – Some elements of the Own the Bank Share Scheme and the subsequent refunding of deposits drew disavowing publicity from some sectors in society and led to YWBN being perceived to be having a lot of eccentricity – an unusual behaviour not fitting with the norm. YWBN took the repudiation on the chin and continued on the journey, and now we are here.
3. The Upshot: Considering the hurdles that YWBN went through, one should admire the unwavering tenacity and dynamism of the team and the devotion to ignite a movement for economic equity. We are glad that despite odds stacked against us, we continued to soldier on, driven by our vision and conviction to ensuring inclusion of women in the financial economy
4. What it means: It means that having undertaken a rigorous assessment of the YWBN CFI application, which includes systematic review of reports and documentation submitted, empirical data on the knowledge, skill, attitudes, aptitude and beliefs of YWBN, the PA and FSCA found YWBN CFI to be fit and proper to operate a Mutual Bank. It also means that the PA and FSCA found the application and business case by YWBN CFI to be premised on sound ground, sustainable and meeting prudential legislative requirements prescribed by the Mutual Banks Act.
5. Why this is important: YWBN CFI is the first BLACK WOMEN group to be issued a Mutual Banking license, thus giving the entity the opportunity to set a benchmark for black women participation and ownership of the financial sector. This is important and a signiticant step to de-racializing the financial sector and turning it into one that reflects the country’s demographics. Not only is YWBN the first WOMEN group to be granted a Mutual Bank license, but also the first CFI to apply and get approval for a mutual bank license.
6. Situational Awareness: South Atrica has one of the world’s most connisticated financial-service industries. However, there is a significant gap between the banked (those that have access to mainstream products such as cheque, savings accounts, term loans, assets finance loans, etc.) and the unbanked or underbaked (those shunned by traditional banking sector, are without banking products at depository institutions, are not fully participating in the financial mainstream, rely on fringe financial sector to service their needs, and are a boon to alternative financial services sector Included amongst the rank of the underbaked are Small Businesses, particularly Black-owned enterprises. They face many obstacles that seem insurmountable. They are woefully underfunded overlooked, and often alienated from the support networks that open doors to life-changing opportunities. It is for the above reasons that South Africa is deemed the world’s most unequal country where 30 years of freedom have failed to bridge the economic divide. Excluded from mainstream banking, the underbaked and underserved segment in society are left vulnerable to exposure, exploitation and fraud by unscrupulous and unregulated financial service providers.
7. Pain Points: Every day, SMMEs are feeling the crunch of the tightening economy with black owned enterprises feeling it the most owing to inability to access finance, thus stunting their development into future industrialists or transitioning into major players in the mainstream economy. These facts are not just statistics, they represent real lives and untapped potential, thus calling for need and serious efforts to break down the barriers that hinders black owned enterprises from thriving financially.
8. Why it matters: Developing black enterprises is more critical in a country like ours where the economy is not only working for a select few, with millions of families left to struggle unfairly, but also has a financial sector that is dominated by white male. The dominance of the sector by one demographic grouping to the exclusion of the rest is incongruous to country efforts to building an economy that works for ALL. It is this incongruity that YWBN Mutual Bank will endeavour to address. Of particular focus would be financial inclusion of small and medium-sized businesses, particularly those that provide services to township and rural dwellings to ensure economic equity.
9. Reality Check: It would take new thinking, innovations to existing systems and creative solutions to change the status quo. YWBN is alive to these realities and is committed to righting the historical wrongs and ensuring financial inclusion of women in the economy, making sure they are able to build savings, start a business, or own their home – all of which are critical elements to building generational wealth and thus prosper.
10. The Difference: YWBN Mutual Bank will not only be seized with addressing the financial needs of the unbanked and underserved sector of the population but also raising innovation and competition in the financial sector as well as bringing the needs of the “unseen” segment to greater focus, thus helping propel the industry to greater heights, albeit the inclusive way. Driven by discipline, the WBN team is determined to take on the challenging task and has what it takes to see to the attainment of this goal.
11. The Jourey Ahead: While getting the banking license was an ardours task, YWBN is alive to the fact that building one will be even harder. Accordingly, YWBN has set what it believes are ambitious but realistic financial goals to achieve success. Still, a lot of hard work will be required to realise success. Fortunately, the organisation is blessed with personnel of high caliber with high degree of integrity, honesty, transparency, ethical leadership, professional competence and due care, confidentiality, accountability and thorough understanding of the banking sector, governance and legislative requirements. Further, the team is imbued with positive thinking, unmatched energy,
dynamism and are devotedly determined to reducing and eliminating barriers to access in the
financial sector for HDIGs in general, and WOMEN in particular.
12. Way Forward: With the task to acquire a mutual banking license now accomplished, the focus now shifts to building a bank. As we embark on this journey, we shall endeavour to avoid the potential pitfall of overshooting or beginning too quickly – by pacing ourself. In this regard, the year ahead will focus on capital raising, setting up banking network to make basic financial services more accessible to unbanked and underbaked consumers. Focus will also be on developing systems and technology that will help distribute capital more equally and better serves the interest of the marginalised groups currently excluded from financial services. This will be followed by the commercial launch of the Mutual Bank. Additional specifics will be provided in future.
13. Plea: Building a bank is a complex matter. We are going to need your help to make a difference.
Meanwhile, we would like to humbly request to be given an opportunity period of solitude and space as we build the bank from ground up. Soon, in the not so distant future, YWBN will invite you to be part of this movement because it can only be strong when we have your partnership.
14. Conclusion: All in all, we are super excited to have this opportunity and vow to use it to transform the financial sector and our economy into one in which everyone can build wealth and prosper, particularly so for the black majority who have historically and intentionally been excluded from economic opportunities.
The process to build a black owned bank and better prosperity for ALL begins now!
Thank vou.
Issued by the YWBN
Office: 087 550 3212
WhatsApp: +27 71 332 1190
