Co-operative black bank in professionals’ vision

A GROUP of black professionals have been spurred to establish a co-operative financial institution (CFI), a precursor towards Khanya Co-operative Bank, in an effort to address the need to transform the country’s banking sector.

Steering committee member Sibonelo Radebe, a veteran financial journalist and publisher of ujuh.co.za, said they were in the process of preparing for a CFI licence.

He said for this type of licence they needed a minimum of 200 people as members and R100 000 equity. They currently are short of 50 members, and the membership fee is R2 500. The CFI licence would allow them to take deposits and give loans to their members.

Radebe said: “We must get to 200 members before the end of the year, so that by January we prepare the application and take it to the regulator to get the licence. We decided that we are going to start with an FCI licence, then three years down the line upgrade to a co-operative banking licence.”

He said a commercial banking licence costs about R250 million, while a co-operative banking one cost about R20m.

“Our model tells us that within three years we will surpass R20m in deposits, which will qualify us for a co-operative banking licence, and within five years we can get a mutual banking licence,” said Radebe, stressing that they were not establishing another Standard Bank.

“We are about establishing a community-based financial institution, which is going to be owned and controlled by members. We want to build an institution of the future, we are building a multi-generational wealth institution,” he said.

Radebe said that they were in a better position to establish the co-operative bank and groom into a “richer financial institution” within the next 10 years.

Khanya Co-operative Bank would join a growing list of banks seeking to disrupt the hegemony in the country’s untransformed banking sector, led by Standard Bank, FirstRand, Nedbank, Absa and Capitec over the country’s untransformed financial sector.

Last month, Discovery moved a step closer to running a fully fledged retail bank after the Registrar of Banks granted the financial services group a banking licence.

Operating licence

In September, TymeDigital by Commonwealth Bank said it had been issued with an operating licence by the South African Reserve Bank (Sarb). This was the first licence issued to a new bank by the Sarb since 1999. In July last year, the Sarb granted authorisation to the South African Post Office to establish its own bank.

“We are for transformation of the sector,” said Radebe, noting that over the past two decades little has happened in implementing a meaningful transformation of the lucrative industry.

“Look, Absa and Standard Bank have been there for 100 years. They have a particular culture, so for you to come in in an established institution and think you will transform it is a dream, it’s not going to happen.”

Black people and communities, stressed Radebe, needed to start institutions from scratch in order to realise a meaningfully transformed financial sector, adding: “In South Africa we have a rich stokvel sector.”

Experts estimate that there are more than 820 000 stokvels in the country with a combined membership of 11.4 million people handling more than R44 billion per annum.

Radebe was scathing of politicians who used the call for nationalisation of banks without compensation as a “political football”.

This as EFF leader Julius Malema’s motion on the nationalisation of banks without compensation was rejected as unconstitutional and a mad idea by MPs a week ago.

@luyolomkentane