The Young Women in Business Network (YWBN) says it has taken a major step forward to opening its doors in South Africa as a mutual bank, having now received its mutual banking licence from the South African Reserve Bank’s Prudential Authority.

First announced back in 2018, YWBN, operating at a cooperative financial institution (CFI), said it would start the process to becoming the first women-owned bank in South Africa by converting its operations from a CFI – which can only offer services to its members – to a fully-fledged mutual bank.

The group received the necessary approvals to start building a mutual bank, but hit regulatory hurdles in 2021 after its ‘Own the bank’ share scheme failed to comply with regulations and it was forced to pay back the money it had raised.

However, on Tuesday (30 January), the group said it had cleared these and other hurdles and it has now been granted a mutual banking licence – saying it would move forward participating “fully and equally” in the financial services sector as a mutual bank.

“This is officially, in the history of South Africa, the first majority women-owned bank,” said managing director, Nthabeleng Likotsi.

Announcing the receipt of the licence, Likotsi said that the bank has a number of firsts to its name: the first women-owned bank, the first black women-owned bank, and the first Cooperative Financial Institution (CFI) to successfully apply for and receive a mutual banking licence.

Mutual banks are banks that are ultimately owned by their depositors, who in turn become shareholders in the bank and can have a say in their operations (through general meetings). These banks tend to be more conservative in their investing and lending operations, usually more focused on saving.

They are also restricted, by law, in their investment and lending operations.

According to the SARB, there are only handful of mutual banks in the country – these include Bank Zero Mutual Bank, Finbond Mutual Bank and GBS Mutual Bank. VBS Mutual Bank was also a prominent player in the sector before being liquidated.

YWBN Mutual Bank license approved by the South African Reserve Bank’s Prudential Authority (PA) with the Financial Sector Conduct Authority (FSCA) concurrence in terms of Section 126 of the Financial Sector Regulation Act, 2017 to register a Mutual Bank in terms of Section 14 of the Mutual Banks Act 124 of 1993.

Likotsi said that the mutual banking licence will allow the group to move forward to a full launch, where it will be able to offer small businesses savings and loan products for cash loan purposes. The group has a particular focus on the unbanked and underserved population.

The MD said that it will look to entrepreneurs and SMEs, particularly in townships for its services – but will also place strong emphasis on saving.

Likotsi said the bank’s focus will now shift to building the bank: raising capital, setting up its network and laying the foundations to better serve the marginal communities it is targetting. This will be followed by the commercial launch of the bank – but she stressed that there is no official date set.

“We have been waiting for this for nine years – what is one more?” she said.

Ostensibly, this would put the official launch window for YWBN Mutual Bank some time in 2025 or beyond.