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YWBN Gets Their Banking Licence

The Young Women in Business Network (YWBN) has successfully obtained a mutual banking license from the South African Reserve Bank’s Prudential Authority.

Stepping Up Their Game

This achievement marks a significant step towards the establishment of the first majority women-owned bank in SA.

YWBN’s journey began back in 2018, with YWBN aiming to transform from a cooperative financial institution to a fully-fledged mutual bank.

A cooperative financial institution is like a club where members work together for their financial needs. In a CFI, people club together to save money and help each other with loans. It’s like a group of friends pooling their resources to support each other financially.

A fully fledged mutual bank means it’s a real bank owned by the people who put their money in it.

Unlike a CFI that is more like a savings club, a mutual bank is a main stream bank where the people who have accounts there also own a piece of the bank. So, if you have an account in this bank, you’re not just a customer; you’re also a part-owner.

A shift from a Cooperative Financial Institution to a “fully-fledged Mutual Bank” means that YWBN are moving from a group savings and loan setup to a more formal banking structure where the account holders will become owners and have a say in how the bank is run.

Overcoming Challenges Along The Way Challenges Along The Way

However, the road wasn’t without challenges, as regulatory issues in 2021 related to their ‘Own the bank’ share scheme required them to repay raised funds.

YWBN has now overcome these obstacles, securing its place as the first black women-owned bank and the first Cooperative Financial Institution (CFI) to receive a mutual banking license. Mutual banks, where depositors become shareholders, are known for their conservative approach to investments and lending, focusing on savings.

The mutual banking license grants YWBN the ability to offer essential financial services to small businesses, with a particular emphasis on savings and loan products for cash needs.

Targeting unbanked and underserved populations, especially in townships, the bank aims to serve entrepreneurs and SMEs. Managing director Nthabeleng Likotsi recently highlighted the importance of building capital, establishing networks, and laying foundations to better serve marginalized communities.

Although the official launch date is yet to be set,  a launch window possibly in 2025 or later is likely. These things take time. 

This development signifies a positive step towards financial inclusion and empowerment in South Africa.