NTHABELENG Likotsi, the founder of Young Women in Business Network (YWBN), has set the record straight after questions about her mutual bank surfaced on social media.
This comes after a Twitter user Koshiek Karan (@iamkoshiek) started a thread raising concerns about the mutual bank. He questioned the membership fee that members pay to join the bank and the time frame that investors will see returns on their investments.
Koshiek Karan is a popular social media commentator who comments on finance issues.
“The first red flag on YWBN is the 'membership fee' for 100 bucks. Having done a fair share of capital raising it's the first time I've seen a non-refundable membership fee to participate in an issuance. It's not common,” @iamkoshiek said.
After the thread, Likotsi responded to @iamkoshiek, Likotsi later trending on Twitter on Friday.
The mutual bank is digital, it is available as an app on cell phones, and it won’t have branches as it is not a commercial bank. The bank offers two products: savings and business loans. The bank is raising capital from the investors, who automatically become co-owners of the institution.
In a statement, Likotsi who is the first woman to own a mutual bank in South Africa, said her Tweets were meant to spark a conversation.
“The Young Women in Business Network wanted to shed some light on the concerns raised by members of the public and prospective investors of the YWBN mutual bank”.
She said it was important to note that while the bank's licence has not been granted as yet, the South African Reserve bank has approved her ownership of a mutual bank in March.
Likotsi addressed the questions about the R100 joining fee that members pay to be part of the bank.
“We, unfortunately, do not have old money or access to capital to fund a start-up bank, we cannot be compared to how other financial institutions started because we would need to go back to history, we don’t have such privileges, hence the YWBN founders and shareholders took a risk over the past ten years working tirelessly to at least get us to a point where the majority of the people can now participate in the proposed YWBN mutual bank,” she said.
Likotsi said due to VBS mutual bank’s downfall and mistrust from the public, she welcomed constructive criticism.
“We want to be transparent on our business model, shareholding structure, governance structure, the name of the mutual bank, and how the bank is being established,” she said.
VBS mutual bank is a black-owned financial institution; its mandate was initially to operate as an investment scheme to encourage and help communities invest. Years later, it was discovered that billions had been siphoned out of the bank.
Likotsi said she compiled a list of questions and comments from members of the public to create clarity and ease for investors and prospective investors.
“We can assure you that your money will be safe, we have proven ourselves,” she said.
Meanwhile, the bank offered shares to the public on June 1 and it sold one million shares within 72 hours of trading.
Here is the Twar (Twitter spat) between @iamkoshiek and Nthabeleng Likotsi.
Thinking of investing in YWBN Mutual Bank? [Thread]
— Koshiek Karan (@iamkoshiek) June 3, 2021
Now that this thread is done 👏![CDATA[]]>🏾
— Nthabeleng Likotsi (@MissNthabeleng) June 3, 2021
Would have been great if it didn’t have so many swear words but ke where would I even start to educate @iamkoshiek about registering a Bank if he doesn’t even know how Co-operatives work 🙆![CDATA[]]>🏽♀️
I really can’t be teaching experts on membership fees. https://t.co/qV7PJoUftS