Co-op in bid to get banking licence
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 co-operative 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 in 2016 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.
"SA 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 in 2016 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 SA in the form of stokvels.