Plans for first black bank on hold due to fears

Daily Dispatch - - Business - By REITUMETSE PITSO

A TOUGH eco­nomic en­vi­ron­ment and fears that it could be yet an­other pyra­mid scheme have led to the de­layed reg­is­tra­tion of Khanya Co-op­er­a­tive Bank (KCB), a fi­nan­cial in­sti­tu­tion with as­pi­ra­tions of be­com­ing a fully black-owned bank.

“We have re­solved to the goal of ap­ply­ing for a co­op­er­a­tive fi­nan­cial in­sti­tu­tion li­cence in March 2018 and then work to­wards reg­is­ter­ing a co-op­er­a­tive bank­ing li­cence,” said KCB steer­ing com­mit­tee mem­ber Si­bonelo Radebe.

The idea of a black bank was met with en­thu­si­asm last year but has since lost steam, with prospec­tive mem­bers be­ing con­cerned about re­turns.

Radebe said the or­gan­i­sa­tion fell short of 50 mem­bers to meet the 200 min­i­mum mem­ber and R100 000 eq­uity re­quire­ment for the co-op­er­a­tive fi­nan­cial in­sti­tu­tion reg­is­tra­tion.

“South Africa is tainted with a legacy of pyra­mid schemes, which makes it hard to re­cruit mem­bers at R2 500 each . . . We are now grow­ing through a one-on-one re­cruit­ment ba­sis.”

KCB was started last year with the goal of fa­cil­i­tat­ing the fi­nan­cial in­clu­sion of black pro­fes­sion­als. Its mem­bers com­prise black pro­fes­sion­als and it aims to ser­vice ele­ments of the bank­ing sec­tor not catered for by do­mes­tic banks.

Radebe said the bank – when it even­tu­ally came into ex­is­tence – would tackle is­sues ex­pe­ri­enced by black pro­fes­sion­als when in­ter­act­ing with lo­cal banks.

“A bank can refuse to ap­prove a loan for a prop­erty in the town­ship but pre­fer to give you an over­draft of the same amount,” he said.

“We are not com­ing in as a sub­sti­tute to com­mer­cial banks but to fill cer­tain gaps, such as supporting the small busi­ness sec­tor, rear­ing live­stock as a form of busi­ness and supporting the stokvel in­dus­try.”

He said that the co-op­er­a­tive bank­ing sec­tor was pop­u­lar in de­vel­oped coun­tries and sim­i­lar mod­els had been in op­er­a­tion in South Africa in the form of stokvels. — DDC

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