For the past decade, South Africa’s biggest banks have enjoyed a docile banking market. There have been no new commercial banking licenses applications in 11 years. That’s all about to change.
At Liyema Consulting, we pride ourselves in celebrating women who are pioneers in their respective industries, and this week we’d like to take a moment to honor Nthabeleng Likotsi. This powerhouse is changing the face of cooperative banking and is planning to challenge the nation’s top five money lenders.
Likotsi is an accountant, businesswoman and community leader. The self-made South African is the founder and chairperson of the Young Women in Business Network Cooperative Bank, which is a majority female-owned and female-led financial institution. She also serves as the executive chairman of Young Women in Business Network (YWBN), the parent company of the cooperative bank working towards financial inclusion in the country and across the continent.
“We will not fail,” the Free State-born entrepreneur recently said. She is very determined to have YWBN, which she launched in 2011, become the first black female-owned Mutual Bank in South Africa.
To understand why Likotsi sees potential where others have not, it is important to tap into her childhood and educational history. She was born in 1985 in Botshabelo, to parents who ran businesses her entire childhood. Inspired, Likotsi went on to study while her siblings immersed themselves in the family businesses. The 33-year-old holds a Masters degree in Entrepreneurship from the University of the Witwatersrand, and a Certificate in Entrepreneurship from the Wits Business School. She also has a postgraduate certificate in accounting, obtained from the University of Johannesburg.
The thick-skinned director admits that she has been turned down more times than she cares to remember- even failing her CAT board exams a couple of times. “There is no space for negativity,” she assures..
When Likotsi started the YWBN, her goal was to create a long-term investment club based on the traditional stokvel model (the power of the collective), but one that spoke to Broad-Based Black Economic Empowerment. She did research and found that the stokvel industry made R44 billion at the time. She worked to create a similar business model that encourages savers to buy shares with their earnings..
And people have taken to it. In 2012, the YWBN had 35 members who were saving R1 000 a month. With the accumulated savings, the network partnered with a company to buy shares in their first investment.
A chance meeting with a woman in Switzerland, in 2014, opened Likotsi to the world of co-operative banking. Upon her return to SA, she began looking into what was required to become a registered co-operative financial institution (CFI).
The YWBN started off with equity capital of R2 million generated from 200 members, and in April 2018, began issuing its first loans of up to R100 000. Four months later, and the network has grown to over 300 members. With that extra capacity, YWBN is able to hand out loans of up to R300 000.
“South Africans are ready for change, and we came in at the right time – when the country was talking about black banks and economic freedom. The only way to achieve economic freedom is when we participate, and it’s up to us to invest our own money, skills and resources. We can’t be waiting for other people to give us things or waiting for government to give us things. It’s high time that black people put their money in everything we do. So we start small and grow from there.” – Nthabeleng Likotsi
The network has more than R1 million in savings, which means that after a year, YWBN can be registered with the South African Reserve Bank as a fully fledged co-operative bank, and can provide audited financial statements.
Likotsi says the most challenging aspect of her job is reworking long-held ideas and preconceptions about investing. “It’s a legacy thing that we are creating and it’s time black people participate in that space as well, and persistence is the key to success,” she says.
Likotsi’s challenge to other black entrepreneurs is to not confine themselves to industries like construction, events management and other supply-and-delivery type businesses. Instead they must look to industrialisation and other sectors where black people aren’t currently represented.
YWBN hopes to set itself apart by appealing to individuals who fall outside of the formal sector, such as self-employed hawkers, taxi drivers and community-based savings pools like stokvels.
As the nature of banking evolves, and we begin to embrace technology,, seeing more women at the forefront as significant players in the future of the industry will certainly inspire many young girls.
Women are a powerful force in the global economy with significant untapped business potential. By harnessing this power, financial institutions around the world can expect to see their business grow from strength to strength.