King Cetshwayo Development Forum NPC

16/12/2023

: PRESS RELEASE :

DECLARATION STATEMENT OF THE NATIONAL CO-OPERATIVE BANKING INDABA, SUN- CITY, 10-14 DECEMBER 2003

We, the participants of the National Co-operative Indaba, held in Sun-City, Northwest Province, under the theme "CBIs as financial intermediaries of choice for local economic growth," are pleased to announce the successful conclusion of this five-day meeting.

The National Co-operative Banking Indaba, hosted by the Northwest Government and Co- operative Banks Development Agency (CBDA), is an important event in the co-operative banking movement's annual calendar.

This gathering brings together stakeholders from the co-operative banking sector to discuss and address key issues, challenges, and opportunities. It serves as a platform for co-operative banks, co-operative financial institutions, policymakers, regulators, industry experts, and other stakeholders to collaborate, share knowledge, and strategies on ways to strengthen and grow the co-operative banking sector. Indaba was blessed by the presence of the veterans of the co-op banking sector as well as representatives of the co-operative banking movement from Swaziland and Congo.

During this event, significant decisions were made, including the establishment of a secondary co- operative bank and a representative organisation for the sector. Awards were presented to outstanding co-operative banks and co-operative financial institutions, and newly registered co- operative banking institutions were welcomed. We reaffirm our dedication to the principles of co- operation in banking and our commitment to building a stronger and more inclusive financial and economic system for all.

We hereby declare the following outcomes and key decisions reached during our discussions:

• Establishment of a National Secondary Co-operative Bank (NSCB): Recognising the need for a dedicated secondary co-operative bank that caters to the financial needs of the registered co-operative banks, co-operative financial institutions and promotes financial and economic inclusion, we have decided to take concrete steps to form the proposed NSCB. The sector will submit an application for registration with the Prudential Authority of the South African Reserve Bank early next year.

• Establishment of the South African Co-operative Banking Association (SACOBA): Understanding the importance of a unified voice for the co-operative banking sector, we have resolved to form SACOBA. This organisation will represent the sector before the government, parliament, and at international levels. SACOBA will advocate for favourable policies, fair tax treatment, and relevant regulations for the sector. It will also foster collaboration, knowledge sharing, and capacity-building among co-operative banking institutions.

• Promoting Financial and Economic Inclusion: We remain committed to promoting financial and economic inclusion through the establishment, growth, and development of the co-operative banking model. The model is founded on the principles of ownership and control by the people themselves. Strategies and initiatives were devised during the Indaba

to expand access to financial services for all, including trade unions, stokvels, burial societies, church organisations, village, and township communities. A joint public awareness campaign will be conducted in 2024, with the aim of reaching at least 400,000 members by 2030, through the efforts of the government and the co-op banking sector.

• Welcoming Government's Support: We welcome the Department of Small Business Development's support for the sector through appropriate financial and non-financial institutions. While we appreciate the merger of CBDA into the soon-to-be-created agency for small enterprise development, we emphasise the need to continue ring-fencing CBDA's current activities to provide specialised support services to the co-operative banking sector.

• Co-operative Banking Awards: The Co-operative Banking Indaba took the opportunity to honour and recognise the outstanding achievements and contributions of co-operative banks and co-operative financial institutions across the country. Awards were presented to Kingdom CFI for outstanding achievement, NASASA CFI for top-performing start-up, Umnotho CFI for compliance, and Ziphakamise Co-op Bank for milestone awards. We also applaud the Presidential Awards presented to Mutapa CFI in November 2023. These awards highlight the vital role that the co-operative banking sector plays in expanding ownership and control of financial services by workers and communities.

• Welcoming Newly Registered Co-operative Financial Institution Since 2022 indaba: We extend a warm welcome to the newly registered co-operative financial institutions that have recently joined the sector. Midrand Savings and Credit Co-operative (MIDRAND SACCO) and Asikhulesonge Savings and Credit Co-operative (Asikhulesonge SACCO) have shown their commitment to serving their communities and supporting the co-operative banking movement. We pledge our support and co-operation to help them thrive and succeed in their mission of financial and economic inclusion and community empowerment.

Issued by:

SACOBA - contact: Mr Raymond Makgongwana, Cell no. 065 601 1260 / 062 704 4912 NSCB – contact: Mr Sandile Ntshangase, Cell no. 076 010 5075

21/02/2023

Dear All, I hope all is well on your side. On Thursday evening from 17:00 to 19:00 PM, we're scheduling a Zoom meeting to discuss either a resuscitation of Black Capital co-op bank or the formation of a new co-op bank.

Access to affordable working capital remains a key challenge for small business concerns. The formation of Black Capital was largely informed by this reality.

Black Capital [www.bcfsc.co.za] was registered and licensed by SARB but later deregistered due to its failure to comply with Prudential Standards.

The meeting aims to set the scene and take stock of a number of regulatory hurdles that must be fulfilled towards the registration. It is open to all like-minded individuals who are interested in owning shares in the co-op bank and using it as a vehicle to affordable project development finance.

The meeting link and draft agenda will be circulated on Wednesday 21 February, 2023.

To receive the link and agenda via email, please send a request to [email protected]

Regards

Black Capital Financial Services co-operative (“BCFSC”) is a registered and licensed financial services provider in terms of the Financial Sector Regulation Act, the Co-operatives Banks Act, Co-operatives Act and National Credit Act.[read more...]

12/08/2021

What is DSBD doing to support SMMEs’ affected by the lootings?

Business Recovery Support Programme
-Blended finance (60% grant & 40% loan)
-Max: R2m
[email protected]

Informal Traders Support Programme
-R3k Grant
[email protected]

Visit our website for more information: dsbd.gov.za

08/08/2021

Reading of the five articles below, one can only conclude that the ConCourt impetuous judgement has brought the SA judiciary into a serious predicament. Worse part is any misconstruction or misrepresentations of the of the United Nations International Covenant on Civil and Political Rights will spur or trigger UN into action.



“Section 39(1) of the SA constitution reads: “When interpreting the Bill of Rights, a court, tribunal or forum ¬– (a) must promote the values that underlie an open and democratic society based on human dignity, equality and freedom; (b) must consider international law; and (c) may consider foreign law”.



While 12. (1) states “Everyone has the right to freedom and security of the person, which includes the right— (a) not to be deprived of freedom arbitrarily or without just cause; (b) not to be detained without trial; (c) to be free from all forms of violence from either public or private sources; (d) not to be tortured in any way; and (e) not to be treated or punished in a cruel, inhuman or degrading way”.



And 35. (1) reads “Everyone who is arrested for allegedly committing an offence has the right—

(3) Every accused person has a right to a fair trial, which includes the right—

(a) to be informed of the charge with sufficient detail to answer it;

(b) to have adequate time and facilities to prepare a defence;

(c) to a public trial before an ordinary court;

(d) to have their trial begin and conclude without unreasonable delay;

(e) to be present when being tried;

(f) to choose, and be represented by, a legal practitioner, and to be informed of

this right promptly;

(g) to have a legal practitioner assigned to the accused person by the state and

at state expense, if substantial injustice would otherwise result, and to be

informed of this right promptly;

(h) to be presumed innocent, to remain silent, and not to testify during the

proceedings;

(i) to adduce and challenge evidence;

(j) not to be compelled to give self-incriminating evidence;

(k) to be tried in a language that the accused person understands or, if that is not

practicable, to have the proceedings interpreted in that language;

(l) not to be convicted for an act or omission that was not an offence under either

national or international law at the time it was committed or omitted;

(m) not to be tried for an offence in respect of an act or omission for which that

person has previously been either acquitted or convicted;

(n) to the benefit of the least severe of the prescribed punishments if the

prescribed punishment for the offence has been changed between the time

that the offence was committed and the time of sentencing; and

(o) of appeal to, or review by, a higher court”.



Article 9 of the United Nations International Covenant on Civil and Political Rights “recognises the rights to liberty and security of the person. It prohibits arbitrary arrest and detention, requires any deprivation of liberty to be according to law, and obliges parties to allow those deprived of their liberty to challenge their imprisonment through the courts. These provisions apply not just to those imprisoned as part of the criminal process, but also to those detained due to mental illness, drug addiction, or for educational or immigration purposes”.



“Article 14 recognizes and protects a right to justice and a fair trial. Article 14.1 establishes the ground rules: everyone must be equal before the courts, and any hearing must take place in open court before a competent, independent and impartial tribunal, with any judgment or ruling made public. Closed hearings are only permitted for reasons of privacy, justice, or national security, and judgments may only be suppressed in divorce cases or to protect the interests of children. These obligations apply to both criminal and civil hearings, and to all courts and tribunals. Article 14.3 mandates that litigants must be informed promptly and in detail in a language which they understand”.



“The rest of the article imposes specific and detailed obligations around the process of criminal trials in order to protect the rights of the accused and the right to a fair trial. It establishes the Presumption of innocence and forbids double jeopardy. It requires that those convicted of a crime be allowed to appeal to a higher tribunal, and requires victims of a Miscarriage of justice to be compensated. It establishes rights to a speedy trial, to counsel, against self-incrimination, and for the accused to be present and call and examine witnesses”.

The SA constitutional has an urgent if not embarrassing responsibility to urgently release the former President.

22/04/2021

Capitec sees future in SMEs
Acquisition aids move into ‘neglected’ sector of business banking
Capitec’s move into business banking, cemented by the acquisition of Mercantile Bank at the end of 2019, is gaining momentum — customers in this segment surged 33% in the year ended February.

The growth in business banking customers to 90,000 may come off a low base but CEO Gerrie Fourie believes there are good growth opportunities for the bank in the often neglected small and medium enterprise (SME) sector.

In an interview following the release of the group’s full-year results this week, Fourie made it clear the strategy is not to rush the process but to build out steadily, putting in place the “fundamentals for growth in this segment over the long term”.

“We believe there are opportunities. We believe that if you look at the fees [in the business banking segment], they are expensive and complex and people don’t understand them,” he said.

“Go talk to SMEs and whenever you ask how their business banking is, you don’t get a good answer.”

Fourie believes SMEs and “even the informal market” hold the key to unlocking the growth potential of SA. “That’s where employment and growth in South Africa can make a big difference. That is why we want to focus on the SME and smaller market.

“If you look at the last 15 years, the government, which used to do a lot of the employing, is not any more, while the private corporate sector has become leaner and is not appointing more people at the moment. That is why we need to get the SME market growing and unlock opportunities for entrepreneurs to appoint people and to grow.”

But that doesn’t mean that Capitec, which was launched 20 years ago with its disruptive business model, will neglect its core re- tail segment. Fourie said the retail banking segment — with 15.7-million customers — will remain the focus area. And while it may be reporting slower customer growth than business banking, the 14% increase in customer numbers in the retail segment still represents 2-million new clients.

“That is the dangerous thing about percentages,” he said.

“If you are growing off a small base it is very easy to say the percentages are high. For us it’s not about simply growing the business banking, for us it’s about putting the fundamentals in place, making certain we have a unique client service that we can scale.

“Whatever clients we get, that is a bonus.”

Fourie said the focus is to grow Capitec’s retail offering and make sure the service model and scalability are ready at business banking before Mercantile Bank is rebranded.

“We will probably only rebrand in the middle of next year, when we are happy that we can handle the volumes,” he said.

Anchor Capital fund manager Liam Hechter agrees that the SME market has possibly been neglected and underserviced.

“That’s probably the angle or gap that Capitec sees for its next leg of growth.”

He said Capitec’s record in terms of servicing a part of the market neglected by its peers has been exceptional.

“You think about them going into lowerend banking, where the focus of their peers in South Africa wasn’t necessarily there. They are up to 15.7-million retail banking customers and that happened on the big banks’ watch because they probably weren’t paying as much attention to that space.

“So if they [Capitec] can cross-pollinate that across to business banking, where they are focusing once again on SMEs through Mercantile, as opposed to mid-sized businesses and corporates, they probably see a niche market that is underserved at the moment,” Hechter said.

Capitec is also steadily moving into other segments traditionally dominated by the big four banks, such as home loans.

However, Fourie said Capitec’s move into the mortgage market in partnership with SA Home Loans in November last year is more a long-term play aimed at retaining relationships with its customers than a core focus area. It has received 24,000 home loan applications.

“Let’s say you are a 25year-old who banks with Capitec and all your accounts are with Capitec and now you get married and you want to buy a home. You already have a loyal relationship with us and we don’t want to send these customers to other banks and so we offer this product to the client.”

Fourie said the mortgage market is one that “we will grow in much later”.

FNB portfolio manager Wayne McCurrie said though business banking and the mortgage segment are difficult areas in which to take on the big banks, the larger players are a “bit envious” of the relationship Capitec has with its customers.

“I think Capitec clients really like them, which gives them an edge.”

But it’s still a big task to take on the big banks in home, motor and business finance, McCurrie said.

“The big banks know what they are doing there, like Capitec knows what it’s doing in the microloans market.”

Capitec’s full-year results show that while annualised basic headline earnings were down 27% to R4.6bn due to the effect of the pandemic, the performance during the last six months of the financial year was strong, with an 18% increase in headline earnings to R3.9bn.

The group also declared a final dividend of R16 an ordinary share, compared with the 755c delivered in the first half of the previous year.

McCurrie said the big dividend is a “very big statement from Capitec”.

“It says we are fully liquid, are well provided for, have no capital issues and are over the virus and bad loans.”

Ashburton chief investment officer Patrice Rassou called Capitec’s results very strong and said the second-half increase in headline earnings showed the bank was “very conservative” in the first half in terms of provisioning for bad debts.

07/03/2021

Give SMEs more breaks, Khoza pleads

Lack of business nous in the government is ‘crippling the sector’

The small and medium enterprise (SME) sector in SA is being throttled by a government ministry that understands politics but not commerce.

This is the view of Reuel Khoza, chair of the venture capital firm Hlayisani Growth Fund (HGF), who said this week entrepreneurs and SMEs could be driving job creation, but the government’s lack of business know-how is blocking it.

He cited a regulatory framework that he said hobbles SMEs with red tape, and said the corporate tax burden was “smothering business” and preventing growth.

Khoza, who is also chair of the Public Investment Corporation, Dzana Investments and Assupol Insurance, said the one-percentage-point cut in the corporate tax rate in the budget last month was “a good sign”, but did not go far enough.

Stagnant growth in the SME sector is a perennial problem.

Three years ago, in its report “The Unseen Sector”, the International Finance Corp highlighted the issue.

It noted that 50%-60% of SA’s workforce is employed by SMEs and micro enterprises, which it said contribute an estimated 34% to GDP.

But companies in the sector managed average growth of only 14% over the previous decade, “capping their job creation and economic contribution potential”.

Last week, Stats SA reported a record unemployment rate of 32.5% in the last quarter of 2020.

Khoza said it is not only the department of small business development that is at fault; all government departments play a part, especially those that do not pay SMEs in their supply chain promptly.

“Some invoices are over 90 days in arrears,” said Khoza, while the agreed payment term is 28-30 days.

This leaves SMEs strapped for cash with no working capital to keep afloat. Many SMEs are left with little option but to resort to invoice factoring — selling their invoices or debtors book at a reduced price to a third party.

This ensures some cash flow so they can continue operating but reduces their margins.

Khoza concedes that the government does at least make the right noises about supporting the sector.

“The government does talk a fairly good game,” he said.

In his budget speech, finance minister Tito Mboweni announced an allocation of R4bn to the department of small business development to fund blended finance initiatives and other help for SMEs in rural and township areas. No further details of how the money will be spent are available so far.

In last year’s budget, R6.4bn was allocated for small business incentive programmes, R2.2bn of it to the Small Enterprise Development Agency.

Funding for the sector is also being affected by changes in two pieces of legislation.

Venture capital companies may lose funding because of the scrapping of section 12J of the Income Tax Act.

“This is a speed bump for venture capital companies,” said HGF partner Eugene van Rensburg — one that would reduce the amount of capital available to fund SMEs.

The tax incentive introduced in 2009 under which an investment in a venture capital company could see an upfront tax deduction will end on June 30.

But investment funding may become available through planned amendments to regulation 28 of the Pension Funds Act.

Published by the Treasury last month, the amendments, among other things, would ease the limit on how much a pension fund can invest in hedge funds and private equity.

At the moment, there is a 15% cap on the proportion of a pension fund’s money that can be invested in “hedge funds, private equity and any other assets not listed in this schedule”.

The Treasury proposes that these asset classes be delinked and recognised as standalone classes, which will increase the amount pension funds can invest in them. The overall collective limit of 15% is to be removed.

Van Rensburg said this is a significant step forward in unlocking a large investor base.

Last week HGF announced its first close of R350m to invest in what it refers to as high-growth, high-impact business.

This funding is in addition to the R200m the venture capital company has already invested in a portfolio of companies that includes:

● Ikeja, which owns and builds bespoke wireless infrastructure in townships;

● Sudonum, call-tracking software that helps businesses understand the effectiveness of their marketing;

● Opennetworks, which offers cloud products and services;

● Leap, which assists businesses with transformation strategies;

● Snapplify.com, a marketplace for digital educational material, related educational services and devices; and

● GoMetro, a technology company that collects transport data that can be applied to a variety of transport systems.

Montegray Capital, set up by tech entrepreneur Michael Jordaan, who also sits on the HGF board, has invested in Snapplify.com and GoMetro.

The HGF fund says it is about to invest in four new businesses ranging from the artificial intelligence and machine-learning sector to providing mass market access to products and services, but has not given details.

In addition, three companies in its current portfolio will receive additional funding to aid with international expansion.

“This is the first close,” said Van Rensburg, with the fund aiming to raise R1bn in investment funding within the next 18 months.

He said there is no shortage of businesses to invest in; the challenge is securing the funding.

The department of small business development did not respond to a request for comment.

Snapplify

23/02/2021

30/01/2021

Agriculture: Plans for a rival to the Land Bank

The state-owned institution’s financial woes have led farmers and agribusiness to consider making an offer on the bank, starting a cooperative bank or partner with global commodities futures traders



The agricultural industry says an alternative agricultural financing institution to the Land Bank could be established within a year. According to the president of the World Farmers’ Organisation and chairperson of the Southern African Agri Initiative, Theo de Jager: “An independently owned and financed bank could be up and running in around a year from now if discussions go well. Remember we did not start these discussions now. We started with the late Mohammad Karaan in 2017.”



Karaan, a respected agriculturalist locally and internationally, died of Covid-19 complications in mid-january.



Agricultural groups have suggested the part-privatisation of the Land Bank to ensure that farmers have a reliable financing source.



The proposals for a restructured or an alternative to the Land Bank comes on the back of the bank’s announcement of a R2.8-billion loss in the financial year with R8.18billion in nonperforming loans.



The auditor general’s report highlighted several key matters that have led to the bank’s poor performance and a significant proportion of nonperforming loans. These included poor management controls, credit models not being maintained and not having the right credit models.



The Land Bank has also been badly affected by a squeeze on access to financing from capital markets as a result of the devaluation of its credit rating and South Africa’s sovereign rating, which meant that it was borrowing at higher rates than commercial institutions.



Restructuring the Land Bank will need to take account of, among other things, the balance sheet, providing enhanced support to emerging farmers on a financially sustainable basis and providing support to commercial agriculture, the treasury says.



De Jager says three options are being pursued as an alternative source of financing for farmers.



These include raising capital from foreign investors and making an offer for the Land Bank; establishing a farmer-owned co-operative bank or establishing a structure to partner with international agricultural commodities futures traders.



“At the moment, we are in discussions with various potential investors from overseas. We have Zoom meetings every week to raise capital to make the government an offer,” says De Jager.



He says that there is a lot of interest from foreign investors, but some are put off by political uncertainty regarding land expropriation policies.



There has also been strong interest in establishing a co-operative bank similar to Rabobank, the Dutch co-operative bank. Discussions are ongoing with various parties, including foreign investors, farmers’ organisations in South Africa, and former co-operatives intermediaries.



Kees Verbeek, chief representative of Rabobank Kenya, says: “Yes, we are aware of the opportunity at the Land Bank. We are in Africa and we are an agricultural bank. We also find Africa to be an interesting place to operate in general. We see a future in agricultural banking in Africa, especially considering technological advancements in the digitalisation of value chains.”



Faans Roos, joint chief executive officer of Capital Harvest, says there is big interest in the private equity markets for investing in the agricultural sector, especially when looking at the numbers.



“So, if they were to go out for tender and you could buy 40% of the Land Bank, I think there would be a lot of interest from the private equity side and investment funds. Even the four main commercial banks in South Africa” says Roos.



The African Development Bank and the New Development Bank could also be tapped to help finance either a public-private partnership or help fund the Land Bank purchase.



The treasury says it welcomes private sector involvement in the Land Bank, but this would need to be guided by the 2016 Private Sector Participation framework.



The agricultural sector has made progress in establishing a platform for accessing production capital from international agricultural commodities traders in Europe and North America.



Mark Barnes, an investment banker and former chief executive of the South African Post Office, says there are established agricultural future traders and discussions are already happening. If all goes well, they could have a structure in place within six months.



“We are now in discussions, and the real challenge is how we aggregate future agricultural supply in South Africa so that we benefit from diversified risk and efficient pricing. The financial failure of the Land Bank and uncertainty of the national treasury guarantees is a catalyst for the creation of such a body, whereas previously the Land Bank owned the game,” says Barnes.



He argues that markets are calling for a restructuring of food security funding, which is likely to result in the disintermediation of classic bank funding.



There have also been investigations into establishing a new co-operative bank, which would be a partnership between foreign investors, local farmers and agribusinesses such as co-operatives and international insurance or agricultural businesses.



Agri SA says the Land Bank should be overhauled and a public-private partnership established, where 40% of the bank would be owned by the government and 60% by the private sector.



Christo van der Rheede, executive director of Agri SA, says this partnership split would extend to board level, management appointments and credit committees at the bank including a critical role in overseeing bank operations.



“We are not proposing the takeover of the function of the state. If I know I’ve put in an investment based on that ratio of 40 to 60% I can claim 60% of the profits. That’s the kind of incentive that the private sector will go for,” says Van der Rheede.



John Purchase, chief executive officer of the Agricultural Business Chamber of South Africa, disagrees with Agri SA regarding the restructuring of the Land Bank. He says he cannot see how investors will want to invest in the Land Bank given its dire financial situation and government’s unwillingness, as a sole shareholder, to provide 100% guarantees.



“The Land Bank holds approximately 29% of South Africa’s primary agricultural debt. Now that’s a big number. So, if the Land Bank were to collapse then it would pose a significant systemic risk to the whole agricultural sector in the country,” says Purchase.



The Land Bank’s loan book is worth about R45-billion, with roughly R35-billion being the commercial book. It is anticipated that this will see a considerable reduction as borrowers move to commercial lenders that offer better loan rates and additional services.



Purchase says that, in the commercial sense, the Land Bank will shrink as clients seek alternative financing sources and in the future it will focus more on development finance, which tends to be riskier because of the applicants’ credit profile, among other issues.



“You can see now that nonperforming loans are massive at the moment; well over 10% of loans,” says Purchase. “But if they want to go down the development route then the government is going to have to support them, and considerably more so than they do at the moment.”



The Land Bank did not respond to the Mail & Guardian’s requests for interviews and information. But a spokesperson did note that chief executive Ayanda Kanana has been involved in negotiations with local funders as well as international development finance institutions.