From stokvel to SA’s first women-led co-operative bank

Meet Nthabeleng Likotsi, executive chairman and founder of the Young Women in Business Network (YWBN), which started out as an informal stokvel and is now a co-operative financial institution for black entrepreneurs

When Likotsi started the YWBN seven years ago, her goal was to create a long-term investment club based on the traditional stokvel model, but one that spoke to the Broad-Based Black Economic Empowerment Act, which is focused on black ownership.

“We did research and found that the stokvel industry made R44 billion at the time,” she says. “I said, as black people, we understand what stokvels are about, so I thought, let us use that same model. But instead of buying groceries or going on holiday, let us save money and buy shares in companies that want to transform.”

By 2012, the YWBN had 35 members who were saving R1 000 a month, and with the savings, the network partnered with a company to buy shares in Namlog – 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).

It took the group just nine months to register with the Co-operative Bank Development Agency – the shortest amount of time any group has taken to register.

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The YWBN started off with equity capital of R2 million generated from 200 members, and in April this year, it began issuing its first loans up to R100 000.

Two months later, and the network has grown to over 300 members. And with that extra capacity, it’s able to hand out loans of up to R300 000.

In order to access loans, one has to be a shareholder in the network, which entails putting down a once-off R10 000 share capital, R550 annual membership fee and committing to contributing R1 000 a month for a five-year period.

“The loans are specifically for entrepreneurs, and the CFI or the bank will at any given time be owned and managed by 60% black women,” she says.

The beauty of a co-operative bank is that unlike commercial banks, the intention behind the business isn’t profit driven, so members have access to short-term loans of either six or 12 months at an interest rate of 5% and 2,5% respectively.

“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,” Likotsi says. “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.”

The network has more than R1 million in savings, which means YWBN can be registered with the South African Reserve Bank as a fully fledged co-operative bank after it’s been operating for a year and can provide audited financial statements.

“We are pushing to have more women and men because we’re not excluding men from joining us.”

Likotsi says the most challenging aspect of her job is changing long-held ideas about investing.

“It’s still very new in SA and black people are used to short-term investment,” she explains. “But this one is five years, so the challenge is getting people to change their mindsets . The education part, the awareness part is part of the process.

“We’re dealing with people’s money, so there are trust issues. Therefore, we’re saying that for credibility, go to the National Treasury website to see that we’re registered there. But over and above that, we have the board in place, we have the governance in place, we have all the processes in place, whereas before, it was Nthabeleng and Portia saying, ‘Give me your R10 000!’”

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Likotsi aims to sign up 1 200 members by February next year, and the network’s five-year plan is to save half a billion rand and create jobs.

“It’s a legacy thing that we are creating and it’s time black people participate in that space as well,” she says, adding that persistence is the key to entrepreneurial success.

“Don’t stop because one person or 10 people have rejected your proposal – carry on and knock on doors, because no one is going to give it to you on a silver platter. You have to work 10 times harder to open up those doors. ‘No’ is not the end.”

Her challenge to other black entrepreneurs who have been in business for a while is to move away from construction, events management and supply-and-delivery type businesses, and look to industrialisation and other sectors where black people aren’t currently represented.

For more information, email info@ywbn.co.za