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Joburg and Gauteng province in big push to establish co-operative banks Print E-mail
17 August 2017
CoJStdbank

The City of Johannesburg has teamed up with the Gauteng Provincial Government in a new move to establish co-operative banks in the city.

The City’s Economic Development Department is, through the Co-operative Forum, working with the Gauteng Department of Economic Development (GED) to lay the groundwork for the establishment of the co-operative banks, which have already been given the green light by the National Treasury Co-operative Bank Act of 2007.

GED officials have already visited Kenya and other countries to investigate models that would be best-suited for South Africa. The Kenyan model, which involves the public service, has been selected to tap into the sector.

In terms of the National Treasury Co-operative Development Agency requirements, 200 members can start a bank with an initial investment of R100 000.

“There’s a huge movement around the world for communities to form co-operative banks. The United States and Canada are leading. In Africa Kenya is,” GED official Simangele Nkwinika told members of co-operatives during the City’s Co-operatives Forum on Friday August 11.

Held under the theme “Advancing Economic Transformation of Co-operatives through Government Procurement Opportunities”, the forum was aimed at bringing members up to speed with a range of issues, including the new preferential procurement regulations that came into effect in April 2017 under the Preferential Procurement Policy Framework Act of 2000.

Nkwinika said the fact-finding mission to Kenya was “a revelation”.

She said most government workers such as teachers, police officers and nurses had successfully switched from commercial banks to co-operative banks. She said groups could start a co-operative bank with contributions as little as R50 a month.

Such banks charge low interests and members can access their money much easier.
Already millions of South Africans are members of stokvels, whose contributions are invested in commercial banks for very low interest.

Nkwinika said GED was in the process of identifying service providers to empower stokvels about the programme. A campaign by brand ambassadors, working through churches and community organisations, will also be used to spread the message.

Nkwinika’s colleague, Simphiwe Ndlovu, presented 23 training opportunities for co-operatives offered by the Small Enterprise Development Agency and Productivity SA.

The Co-operatives Forum was launched in 2014 to provide small businesses and co-operatives with information on how to access business opportunities.

Every month between 300 and 350 members of co-operatives from across Johannesburg attend such forums.

“Over the years the forum has gone beyond information dissemination by bringing in experts in finance, marketing and government business,” said Zacharia Matsela, National Convenor of the Co-operative Movement. The National Treasury Co-operatives Development Agency is encouraging South Africans to start saving as collectives. We’re copying the Kenyan model because it supersedes commercial banks. Members can determine interest, loans and repayments,” Matsela said.

Lindiwe Vena of Lenasia South, who was attending on behalf of the Urban Women in Construction Co-operative, said she was impressed. “This was a very informative session. We work in water purification and the information will be very useful to our co-operative.”

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Last Updated on 17 August 2017