The Department of Women, Youth, and Persons with Disabilities (DWYPD) has applied to the Reserve Bank’s Prudential Authority to launch a new cooperative bank in South Africa, aimed at promoting financial inclusion.
- Cooperative banks, unlike commercial and mutual banks, operate as formalized and regulated financial institutions formed by groups of people who take deposits, mobilize savings, and provide loans.
- The proposed cooperative bank will focus on advancing the inclusion of women, youth, persons with disabilities, and their businesses, empowering these vulnerable groups to take control of their financial destiny and protect themselves from abuse.
- The cooperative bank will not be a state or government bank but rather a government initiative in partnership with the Cooperative Banks Development Agency (CBDA), ensuring compliance with legal requirements.
- To establish a cooperative bank, certain criteria must be met, including a common bond among members, a minimum share capital of R100,000, at least 200 members, and financial, operational, and human capacity to operate as a bank.
- The South African Innovative Financial Services (SAIFS) bank, which anticipates reaching 10,000 members and R5 million in deposits within a year, has already submitted its registration package to the Prudential Authority for approval.
- If approved, the cooperative bank is expected to be launched officially in January 2024, with operations commencing in July 2024, offering savings and investment services.