Establishment of a cooperative bank (for women, youth, and persons with disabilities)

Meeting report

Chairperson’s Opening Remarks

The Chairperson welcomed all the Members to the platform. Ms Mandy Balie, Committee Secretary, confirmed that a sufficient number of Members were present to continue with the meeting.

The agenda was shared with the Members on the screen, and the Chairperson briefly took them through the items.

The Chairperson said that the Committee was going to be briefed by the Minister and the Department of Women, Youth and Persons with Disabilities on the establishment of a cooperative bank for women, youth, and persons with disabilities. Thereafter, the Committee was supposed to be briefed by the Parmed Medical Scheme on limited reproductive health, pregnancy, and birth (maternity) benefits available to women Members, and report on outstanding responses to questions and matters raised in previous interactions. However, they indicated that they were not going to be able to brief the Caucus.

Ms Balie stated that she received apologies from Minister of Public Service and Administration, Ms Noxolo Kiviet; Deputy Minister of Sport, Arts and Culture, Ms Nocawe Mafu; Ms T Breedt (FF+); Minister of Social Development, Ms Lindiwe Zulu; Ms M Sukers (ACDP); Deputy Chairperson of the National Council of Provinces, Ms Sylvia Lucas, Ms L Bebee (ANC, KZN); Ms T Masondo (ANC); Ms L van der Merwe (IFP); Ms C Visser (DA, North West); Ms D Christians (DA, Northern Cape); Ms C Labuschagne (DA, Western Cape) and Ms S Boshoff (DA, Mpumalanga). She reminded the Chairperson that Dr Nkosazana Dlamini-Zuma, Minister in the Presidency for Women, Youth and People with Disabilities, was expected to leave the meeting early.

The Chairperson said that, although they had more than ten apologies, they were still going to proceed with the meeting. She asked the Committee for the adoption of the apologies.

Ms P Majodina (ANC) inquired about the number of Members that had to be present for the meeting to continue. She asked how many Members the MPWC has, and how many Members had to present in the meeting.

Ms Balie said that, according to the Joint Rules, 15 out of approximately 182 Members of Parliament had to present for a caucus to take place.

Ms Majodina said it was unacceptable that only 15 Members had to be present out of 182 official Members of Parliament. She suggested the Joint Rule of Parliament amend the rules. If they continued to only require just 15 Members to be present, then they were never going to have a sufficient number of Members present. Fifteen Members was not nearly even 50% of the entire MPWC.

The Chairperson said that they had the same challenge in the Standing Committee. She said that the Secretariat would make the recommendation to the Joint Rules Committee. She thanked Ms Majodina for her input.

Ms M Ntuli (ANC) said that her hand was up for adopting the agenda. However, she echoed the issue that Ms Majodina raised to the Committee.

The Chairperson said that, as women, they should all know by now that there is either a Caucus or an MPWC on a Thursday.

Ms N Maseko-Jele (ANC) seconded the adoption of the agenda.

The Chairperson continued with the meeting and allowed the Minister to address the Committee.

Briefing by the Minister and Department of Women, Youth and Persons with Disabilities on the establishment of a cooperative bank (for women, youth, and persons with disabilities)

Dr Nkosazana Dlamini-Zuma, Minister in the Presidency for Women, Youth and People with Disabilities, said that, due to time constraints, they were not going to go ahead with the PowerPoint presentation.

As a Department, they decided that women, youth, and persons with disabilities tended to be excluded by financial institutions in terms of access to finance, and they wondered what they could do as a Department to solve that issue. They came up with the idea of establishing a cooperative bank. She said that, as women, they cannot depend on anyone else. Therefore, they placed it on their priority list. They consulted with the necessary bodies to establish a cooperative bank and they consulted with the Cooperative Banks Development Agency (CBDA) to assist them in developing a concept on how to register a Women, Youth, and Persons with Disabilities Cooperative Bank. Of course, one would have had to go through a whole process before such a cooperative bank could be established. They followed all the necessary steps, and alongside the guidance of the agency. They were advised to have an interim steering committee to drive the initiative, outside of Parliament. The chairperson of the interim steering committee would brief the Committee further on any information on the Cooperative Bank.

Dr Thandeka Ellenson, chairperson of the steering committee, took the Committee through the Cooperative Finance Institute (CFI) “Cooperative Bank” presentation: see attached

She thanked the Chairperson for the opportunity. She introduced the rest of her colleagues who were present with her: including the Secretariat of the Corporate Financial Institution (CFI), and Mr Prince Booi, Chief Director in the Department heading the Economic Empowerment for Youth. They were all representing the CFI. She said that the Minister covered the Department's approach towards the Cooperative Banks Development Agency (CBDA) to advance the financial inclusion of women, youth, and persons with disabilities.

She said that the Department commissioned the Cooperative Banks Development Agency (CBDA) to develop a concept paper to provide information on registering a woman-owned Cooperative Banking Institution (CBI). This initiative was to advance the financial inclusion of Women, Youth, and Persons with disabilities and their businesses and cooperatives.

She guided the Committee through the application requirements, as well as through the timeline of the coordination and facilitation of the Cooperative Banking Institute (CFI). The qualification figures for the application are 200 members and R100 000 minimum to establish the bank.

In addition, they ran a survey indicating participants’ interest in establishing a Cooperative Banking Institute: 82% said yes, and four percent said no. After assessing the result, they decided to move forward with preparing to establish the Cooperative Bank.

The aim was to target poor districts in rural areas to create awareness. CBDA was also mobilised and participated in Women’s Month events for women in agriculture, mining, tourism, ICT, construction, and energy where an interest has been shown to participate in the Cooperative Financial Institutions (CFI) and follow-up was being done by CBDA.

They decided to select an interim steering committee from diverse sectors and skill sets ranging from business, legal, finance, stakeholder relations, civil society, etc., to serve on the management team successfully held online on 18/08/2023. A formal date for launch will be proposed once the application has been approved by the Authority.

See attached for detailed presentation.

Discussion

Ms J Mananiso (ANC) asked a question on the composition of the entity – if it was 100% owned by women, and if not, how many women were represented.

The other thing she wanted to know was more information about the targeted sectors. She asked the Department to provide the Committee with more information on the targeted sectors. She asked if the cooperative had profiles of every province and if they had to look at the profiles to inspire people to join the cooperative.

She asked if the Department had a plan of action programme, and whether or not they have implemented it. Did they set out targets and challenges that they envisioned to face? Also, how did they deal with these challenges?

Ms R Lesoma (ANC) said she missed the Minister’s introductory comments. She commended the Department for its initiative and its efforts to uplift marginalised communities, including women, youth, and persons with disabilities.

She asked what their relationship was with the regulatory bodies.

She asked whether there was any Act that governed the cooperatives. She was unsure whether it was an Act or policy issue.

She suggested that the Department look at past financial institutions and cooperatives to learn from their mistakes and successes.

Dr S Thembekwayo (EFF) wanted clarity on one aspect of joining the cooperative bank, specifically concerning the Members of Parliament. The Sixth Parliament was ending, and some Members of Parliament were not going to return. She asked where they had to ask for permission or approval, who to ask it from, and where.If they wanted to join, where could they get all the available information from, such as where could they get the forms to fill out and where the money has to be deposited?

Ms Maseko-Jele commended the Department for the work that they have done. She said that they (women) have been waiting for an institution like this one for a long time. Many cooperatives have collapsed due to the lack of necessary available capital and she raised the need for these cooperatives to be resuscitated. She said that establishing the cooperative bank might inspire them to re-establish the other cooperatives.

The proposed name of the cooperative is the South African Innovative Financial Services (SAIFS). She asked whether the name of the bank was communicated to and with women and whether they could come up with a native name that could also be translated. It would be good if they could consider this proposal.

She said that she was covered on the issue of who was able to join the cooperative, and whether she was able to join as an individual and not, as a cooperative. She asked for a comment on that.

Ms Majodina said that they needed more public dialogue on this matter. In previous instances, people have been robbed of their money and would therefore be very weary to join such a cooperative. They need to allow people to ask questions and to engage with the Department to gain more certainty and clarity on the matter.

She asked whether they had a steering committee that would do security checks on the people who were going to join the cooperative. She also asked why they had to join as Members of Parliament and not as individuals, as they would do when they normally apply to open bank accounts. 

She said the name was similar to something she once had (she spoke further in her native tongue). She asked whether the name was final or if they were still willing to change it. 

Ms M Gomba (ANC) asked whether the establishment of this bank cooperative was known to the financial sector conduct authority and whether it complied with all the regulations.

She raised her concerns about the fears that could come with establishing such an institution, because of what they previously experienced with the VBS Mutual Bank. She asked whether they had exhausted all the structure of government to ensure that it was a good initiative. Have they received the correct legal advice from institutions of government?

Taking into consideration that women experience various challenges, she said that this was not the only way that they could relieve women of economic frustrations. They needed to look into the social welfare of women as well. She suggested to the Minister that they concentrate and assist women out there with big and serious issues that they are facing, socially as well.

The Chairperson called on Ms T Tobias (ANC) but there was no answer.

Dr Chana Pilane-Majake, Deputy Minister of Public Service and Administration, said that they needed to look into the question about possibly changing the name to give them ownership of the institution, which defines what the bank is all about.

Similar banks have been established worldwide, and she suggested that they look into previously established banks to see how they operate; what challenges they faced; and how they became successful.

On the ownership of the bank, she said that they needed to promote women in business, within the bank as well. They needed to focus on the empowerment of women in all the different dimensions. Having come back from the 35th Conference of the African National Congress, as a resolution for women's economic empowerment, she said that one of the resolutions was establishing project management units in trade and business-related departments. She suggested that the Ministry look into these resolutions to assist and drive the process.

She, once again, congratulated the initiative by the Department.

Ms Tobias apologised and said she had reception. She said that it was wonderful to see a financial cooperative bank finally being established. She highlighted the importance of going through the financial credential authority for the bank to qualify. She suggested they go to the financial services that the government provided for enterprise development agencies to get more funding.

Ms Tobias said that they had to do this, to get more funding, and also for the FCA to be compliant. She said that VBS was a mutual bank and not a cooperative bank. They should be able to clearly distinguish between a cooperative bank and a mutual bank. The project needs to be piloted properly, and they need sufficient support for the bank to emerge properly. There were more than enough governmental institutions that were more than willing to provide financial support for the bank to run.

She said this was a great initiative to establish a cooperative bank led by women to sustain women and enterprises. She emphasised the importance of communicating all the necessary information across provinces to all women. She commended the Department for its initiative again.

Ms M Matuba (ANC) said they have set high standards for gender equality across all departments. Women faced a lot of challenges. She commended the Department for its initiative to empower and uplift women. There was widespread frustration with the financial and banking situation in the country.

She asked if the cooperative bank was prepared to work with other banks, as there was already another cooperative bank in the country. She asked if they had had any meaningful engagements with this bank or were planning on having any engagements. In South Africa, many women were a part of ‘stokvels’. She asked if they had approached these women to observe their economic activities. 

She highlighted the issue around policies in South Africa. She said that one of the major barriers to allowing women to open bank accounts, especially women who were married, was the legal complications, in terms of whether they would go through a divorce. How were they going to look into their policy issues, moving forward?

Recently, a BRICS Summit was held in South Africa in August. Was there any groundwork that was done to analyse the role that a bank for women could play in the future, to forge relationships with women in the BRICS or SADC countries?

She apologised for her connection problems earlier on and made a light-hearted joke, saying that she was technologically challenged and not historically challenged.

Ms M Ramadwa (ANC) asked if the Department had a relationship with South African National Apex Cooperatives (SANACO). They were an organisation that dealt with cooperatives in the country.

The Chairperson said that they exhausted all the hands, and allowed the Minister and the Department to answer the questions that were raised.

Responses

Minister Dlamini-Zuma said that they decided to commission the cooperative developmental agents legally. They commissioned them because they did not want to make any mistakes. The person was given to the Department by an agency. They were guided by a legal entity and they were following the correct legal steps. It was a cooperative bank that was going to be owned by the people who applied to be a part of the bank and bought shares in the bank.

She left all the other questions to be answered by the rest of the team.

Mr Booi said that Dr Ellenson would answer the rest of the questions.

Dr Ellenson said that the bank was owned by women, youth, and people with disabilities. With this being said, that meant that if one bought a share, and were then a shareholder, they were a part or a member of the bank and they were an owner of the bank. This was one of the ways in which they made banking accessible to people. They are also bringing the means of ownership in terms of the share.

They were targeting all sectors of the economy, and they wanted all people to participate in the cooperative bank.

On the implementation, whether they were implementing accordingly or whether they had met their milestones, she said that they had met and exceeded their implementation plan expectations. Everything was going according to plan, and they will find themselves in a good space in a few years from now.

On the relationship between the bank and the authorisation authorities, she said that they were operating according to the laws of the country and this was why they submitted their application to the credential authority because they expected to comply and meet the requirements of the regulatory bodies.

On the provincial representation, she said that they were going to all the provinces and that they were going to ensure that all provinces participated in all Women, Youth, and Persons with Disabilities. They were going to ensure that there was some degree of financial literacy and education, so that people were aware of what they were getting themselves into and to ensure that they made conscious and informed decisions.

On the laws, she said that she was going to address this matter once off. In terms of the Acts related to what governed the cooperative bank, she said that many laws in the country guided the banking and financial sector. A Cooperatives Act of 2005 governed them as a cooperative as a starting point. In addition to that, there was a Cooperatives Bank Act of 2007 that governed the banking side of cooperatives. Over and above that, there were other laws, including financial-related regulations, the NCR, and so on.

On the questions as to how people should go about joining the cooperative bank, she said that, through the Ministry, they would make information available. They will ensure that the necessary information gets to the Members and information about what other products the bank will be offering its members.

On the questions about the name, she said that they would consider all the suggestions. She would present the matter to the Steering Committee to discuss the available possibilities.

On the qualifications, she said that they ensured that they were meeting the regulations of the credential authority. This is why they encouraged support from different governing associations and structures. She was happy to announce that they have been able to meet the requirements thus far. However, they were trying to keep their standards high.

On the issue of having more public dialogue, she said that they were aware of all the uncertainties and questions that people may have. They have received many submissions from people who have said that they have been robbed by various entities in the past. They ensured that they educated people and provided them with the necessary security and comfort. This was so that, when they joined, they would not relive their past experiences with past institutions.

People who were also placed in the positions of handling other people’s money, in the form of a Steering Committee, were being vetted by the credential authority. Every member who handles an operational or oversight role, as far as handling people’s money, would have had to receive clearance from the credential authority. She said that this process was currently underway.

On the question of how Members of Parliament should go about joining the Cooperative Bank, she said that Members of Parliament will not join as Members of Parliament but will rather join as women as part of an association, whether a stokvel or any form of association.

On the recognition of the bank, she said that they would liaise with the Ministry, as far as they were aware. And as far as compliance in the banking sector was concerned, it was taken care of. On the legal advice and structure were concerned, she said it was also taken care of.

On the products offered to their clients, she said they were still awaiting approval from the Credential Authority. They ensured that the programmes met the financial inclusion of all of their members.

On the information of the bank in Bangladesh, she said that they would look into the matter and look at how they could incorporate the lessons from that bank. They would also consider all the other dimensions that were mentioned.

On the process of the PA and the training from the PA to be compliant, she said that they were receiving training from the Cooperate Banking Development Agency (CBDA), which had that mandate to train people who were in. On the process of establishing a cooperative bank, she said that they would make more information available on that, as well as workshops and campaigns. 

Regarding their performance, as far as their targets have been set, they have achieved all their targets, both qualitatively and quantitatively. Dr Ellenson promised that they would continue to maintain their standard.

On the issue raised regarding networking and electricity, she said that they were working on that and would look more into the matter.

On collaborations, she said that they were collaborating with as many possible bodies as they could, to include everyone. They were aware of issues of compliance and various issues with policies and laws, particularly with women and their marital statuses. They were going to work with the Ministry and BRICS. The BRICS Women Alliance was one of their partner associations and they have covered the groundwork as far as that was concerned.

She took note of the matter of SANACO and said they would consider it.

She said they would provide more information to the Parliament through the Ministry.

Minister Dlaimin-Zuma added that this was not the only way in which they were able to empower women. She said they were asked to talk about the cooperative bank, not the various other social issues. They were aware that there were other ways to deal with social issues, and they dealt with some of the issues of other departments. Today, they were asked to just talk about the cooperative bank.

The Chairperson thanked the Minister and her team for their responses and presentation. She allowed time for any follow-up questions from the Members.

She said that when the Department was asked to present to the Caucus previously, she mentioned the issue of the cooperative bank and then they agreed as a Caucus to meet with the Department to discuss the issue of establishing the cooperative bank. That was the reason for their presentation on this day: to brief the Committee about what was happening on the ground. 

Follow-Up Discussion

Ms Gomba asked a follow-up question about the shareholder’s agreement, and asked whether it was signed upon paying the membership fee. She asked if a board of directors was already in place, and asked for more information on that.

Ms Tobias said that government was directly responsible for funding the establishment of a cooperatives bank. There needed to be a budget committee from National Treasury for the Cooperative Bank. Government had to institute certain programmes if it ever wanted to achieve a balance in the economy.

Responses

Dr Ellenson said the membership was R500 and an additional administration fee of R100. She said that R500 bought one share. With that, the buyer would receive a share certificate. If it was an entity that joined the bank, one would then need to pay R1000 and an additional R100 administration fee. Along with that, one would also get a share certificate to indicate that they were part of an association.

On the question about the board of directors, she said that the interim board had 15 members from various sectors, who came from various parts of the country. The interim board was set up to meet the minimum requirement from the credential authority. Once they have been granted approval from the credential authority, they will only appoint a proper broad who will serve for three years, plus a three-year renewable contract.

The Chairperson said that they had come to the end of their session, and asked the Members if they could release the Department from the meeting.

The Minister thanked the leadership of the Caucus, who invited them to talk about the initiative. She expressed their appreciation.

The Chairperson asked if they could continue with the next item on the agenda.

Committee Matters

Ms Maseko-Jele said that the meeting on this day was constructive and allowed the Committee to deal with the matter from all sides. Usually, they deal with more than two presentations and then they are not always able to make valuable contributions.

The Chairperson said they could make valuable contributions to future presentations, if the Members were more consistent in attending the Caucus meetings.

Postponed Briefing by Parmed

The next agenda item was for the Committee to be briefed by Parmed. However, the entity was not able to come to the meeting. Parmed said that they were only going to be able to meet with the delegation on 27 September 2023, at the City Lodge Hotel, not in Parliament. As a Caucus, they needed to agree on whether they were going to meet with Parmed in Parliament.

Ms N Sharif (DA) said that it was a recommendation by the MPWC that Parmed come to them to account for the lack of benefits that women have under Parmed. The reason why they brought this to the MPWC was because it affected women parliamentarians, and it affected them significantly.

The issues about the lack of benefits around contraception, emergency contraception, maternity benefits; and HPV vaccines, all affect women’s health daily. The fact that Parmed has a higher amount for optometry than it does for gynaecology visits was a massive concern. When Parmed met with the Caucus on a previous occasion, they admitted that their benefits were outdated and that they did not take into account the larger number of young women in Parliament. This was a serious issue for the MPWC to deal with. Their mandate was not only to look at issues that women faced externally but internally as well. The issue around Parmed had a direct effect on Parliament. The fact that Parmed determined on a date a place was unacceptable, especially on their recommendation to report to Parliament. The MPWC was an extension of Parliament and the Constitutional mandate, and it has the right to summon any private or public entity before it, for the entity to provide the Committee with answers and to also be given recommendations to implement. She said that it was suspicious for them to cancel the meeting less than 24 hours before the meeting was due to take place. Parmed had to provide the MPWC with answers to all their questions.

Ms C Phiri (ANC) said she was covered by what Ms Sharif said. She said that the MPWC needed to meet with Parmed, instead of sending a delegation to listen to Parmed and then provide the Caucus with feedback.

Ms Matube said that she was covered by her colleagues. She said that Parmed had to appear before the MPWC. They all had questions, and they needed answers directly from Parmed.

Dr Thembekwayo said that she agreed with what the previous speakers said. She said that Parmed had to come to them, and they were not going to go to them.

Ms A Gela (ANC) suggested to the MPWC that they need to visit schools to talk about Human papillomavirus (HPV), particularly in Grade 4. In addition to that, they need to educate young girls to protect them from cervical cancer.

The Chairperson said that the feeling was that Parmed had to return to Parliament to address the Caucus. She said that they would ask Parmed to come to appear before the Caucus. All the Members agreed with this proposal.

The meeting was adjourned.