Cape Town – Sekunjalo Group of Companies’ (Sekunjalo) chairman Dr Iqbal Survé has issued a challenge to the Black Business Council (BBC): Organise and mobilise black businesses to work with the National Union of Mineworkers to retain Ubank.
In a special address to the BBC’s Black Business Summit on Friday morning, Survé said that Ubank, which was recently placed under curatorship, could be an excellent opportunity for the formation of a black-owned bank.
Survé urged the assembled participants to create a consortium of black businesses and entrepreneurs who could take on the challenge.
On the creation of a black-led and focused financial institution, which could be run as a co-operative venture to benefit black business, Survé said: “As the Sekunjalo Group, we are willing to be part of such a consortium of black entrepreneurs and companies.
“We will fund R250 million, on agreed conditions, towards Ubank. Additionally, we will commit a further R250m to Ubank to assist it to provide capital support, in particular, to black entrepreneurs.”
He said he hoped that the BBC would take up the challenge and write to the governor of the Reserve Bank (SARB), indicating it would co-ordinate a team of black entrepreneurs to realise this challenge and that the identified consortium of black companies and individuals would then purchase a majority stake in UBank.
“If we can do this, along with all of you who have participated in this conference, then in a very short space of time we will have the first truly black-owned bank in the country.”
He said this would be an immediate win, not only for the BBC, but for South Africa and it would provide black businesses with the necessary ammo and fighting chance to meaningfully engage in the capital economy.
If the move came to fruition, Survé said he would expect these investments and any other investments to be matched on a 8:1 ratio by SARB, which is the same ratio applied by the Reserve Bank to every other bank in the country.
“In this way Ubank would be able to have [about] R8bn at its disposal and would become an overnight black success.”
He said Sekunjalo would be happy to be a significant minority investor in such a venture.
“Of course, we too would want the right to bank, as we should, in every other bank and have governance processes applied to Ubank, just as they should apply to all such institutions in South Africa.”
He said this kind of social compact was desperately needed in South Africa to accelerate entrepreneurship, reduce inequality and, most importantly, break up the concentrated efforts of the current banking oligopoly.
Survé reminded BBC president Elias Monage and the organisation’s participating in the summit, that at their 2019 summit they had referred to the establishment of a black-owned bank, and told them this was now their ideal opportunity.
“Let’s turn UBank into an overnight success and let’s create SA’s first black entrepreneurial-led bank in partnership with NUM and the mine workers of our country.”
Speaking after Survé, Professionals of the Black Business Council vice president, Yvonne Maitin, said: “I can say that as the BBC we will certainly take up the challenge and explore this further with the bank and yourself.”
UBank Group Limited is owned by Teba Fund Trust and administered by the National Union of Mineworkers (NUM) to service the unserved and underserved market.
It operates in the microfinance sector, which mainly targets lower-income blue-collar workers in the mining industry, with more than 4.7 million active accounts.
When placing the bank under receivership, Reserve Bank governor, Lesetja Kganyago, said: “Ubank has had significant challenges over the years and its capital adequacy has gone down to around 3 percent, far below the average 20 percent.”
Kganyago, however, assured depositors that there was enough liquidity at Ubank to meet its obligations, as it has over R5 billion in assets and that Ubank would continue to be open for business, with depositors continuing to have access to their money and other banking services.
Dr Survé said he found it interesting that during the Covid-19 crisis, all SA banks had a major issue of both liquidity and capital adequacy and that the Reserve Bank intervened to assist these banks, but that it would not intervene to assist Ubank.