Historic Milestone Reached: YWBN Mutual Bank Receives SARB License to Register South Africa’s First Female Majority-Owned Mutual Bank
YWBN Mutual Bank approved!: In a groundbreaking move for economic equity, the Young Women in Business Network Cooperative Financial Institution (YWBN-CFI) has been granted a license by the South African Reserve Bank’s Prudential Authority (PA) with concurrence from the Financial Sector Conduct Authority (FSCA) to register a Mutual Bank. This license makes YWBN-CFI the first black women’s group in South Africa to receive permission to establish a mutual bank, paving the way for increased diversity and inclusion in the financial sector.
The journey to acquiring the mutual banking license was far from ordinary. Over nine years, the Cooperative Financial Institution underwent a series of challenges and milestones that led them to this historic achievement. It began with the formation of YWBN Co-Operative Bank as a deposit-taking financial cooperative in 2015. Recognizing the need for broader service offerings, the decision was made to apply for a Mutual Banking license in 2018.
On June 15, 2018, YWBN-CFI marched to the South African Reserve Bank to submit their application for authorisation. The process involved providing in-depth business case documents to prove the viability of their market and compliance with regulatory provisions. After an extensive assessment, on March 9, 2021, YWBN Mutual Bank received the long-awaited authorization for the establishment of a mutual bank.
Capitalization and Challenges
To fund the new venture, YWBN Mutual Bank issued a public call for participation in the “Own the Bank Share Scheme” in June 2021. Remarkably, despite the uncertainties of the COVID-19 pandemic, over 10,000 people, particularly historically disadvantaged individuals and groupings, joined the Network and contributed approximately R19,000,000.00 (nineteen million rands).
The journey did face setbacks when the Companies and Intellectual Property Commission (CIPC) issued a directive in July 2021 that the co-op violated certain sections of the Companies Act regarding the share scheme. However, YWBN promptly complied with the directive and refunded all capital raised within the prescribed period.
Throughout the process, the co-op experienced disavowing publicity, with some sectors perceiving their approach as unconventional. Nevertheless, the co-op remained determined and persevered, leading to the historic achievement they celebrate today.
Significance and Vision
The significance of CFI’s Mutual Banking license cannot be overstated. With a focus on financial inclusion, particularly for small business owners and the underbanked population, YWBN Mutual Bank aims to bridge the economic divide in South Africa. The current financial service industry is largely dominated by white males, leaving black-owned enterprises marginalized and underfunded. YWBN intends to address these imbalances and contribute to a more inclusive financial sector that reflects the country’s demographics.
South Africa’s high levels of inequality and the vulnerability of the unbanked and underserved population make the development of black-owned enterprises critical. YWBN-CFI is committed to righting historical wrongs and ensuring financial inclusion for women in the economy. By providing access to banking services, YWBN Mutual Bank aims to empower individuals to build savings, start businesses, and own homes, thus creating generational wealth and prosperity.
Future Plans and Call for Support
YWBN Mutual Bank will focus on capital raising and building a robust banking network that provides accessible financial services to the unbanked and underbanked populations. Developing innovative systems and technologies will drive equality and better serve marginalized groups currently excluded from financial services. YWBN’s ultimate goal is to launch the Mutual Bank and revolutionize the financial sector with inclusivity at the forefront.
As the bank embarks on this monumental journey, they humbly request the support and partnership of the community. Building a bank is complex, and YWBN Mutual Bank acknowledges the need for a collective effort to make a meaningful difference. In due course, they will invite the public to join their movement toward economic equity and shared prosperity.
In conclusion, the issuance of a mutual banking license to the co-op marks a historic milestone in South Africa’s financial sector. This achievement paves the way for increased representation and economic opportunities for black women and underserved communities. YWBN Mutual Bank is excited to embark on this transformative journey, working towards financial inclusion and building a prosperous future for all.
