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Bongumusa Ntuli
ChairpersonCebisa Financial Services Co-operative
+KZN Association of Co-operative Financial Institutions
+National Association of Co-op Financial Institutions of SA
Cell: 071-9315952 / 072-2478017Tel: 012 -346 6020Fax: 012 -346 5891www.nacfisa.co.za
‘Innovative ways to Sustain Local Economy’
MsunduziBusiness Informal Economy Day
08 May 2015
Socio-economic context of enterprises in SA
Why skills are important
Enterprise Management Core Competencies
What skills set are required
Are skills alone enough
Viable and sustainable enterprises
How to join Cebisa and gain financial freedom
TopicsTopics
Socio-economic context of enterprises in SA
Are South Africa’s enterprises in general and black owned in particular haunted by the ghosts of
apartheid past practices?
Or
Or South Africa’s enterprises owners just don’t have what it takes to succeed in business and be
called formal economy?
• Systematic enforced divisions and institutionalized unequal development and access to opportunities along racial lines resulted in inequality in all facets of South African life.
• The inequalities continue to play themselves out in spheres such as:
• Economic productive skills
• Economic infrastructure and services
• Financial services (access to affordable finance)
• Employment opportunities
• Health and education
Socio-economic context of enterprises in SA
R49bn - 2011
R56bn - 2012
R65bn - 2013
Profit of the big 5 Banks
-Commercial Banks-PROFIT AT ALL COST!!!
-Commercial Banks-PROFIT AT ALL COST!!!
-Commercial Banks-PROFIT AT ALL COST!!!
-Commercial Banks-PROFIT AT ALL COST!!!
R1.57 trillion
gross debtors book
R1.57 trillion
gross debtors book
Total outstanding unsecured credit
2007 – R 41bn
2012 – R159bn
2014 – R172bn
NCR: Consumer Credit Market report – June 2014
320%
Notification fee
Notification fee
Cash Deposit fee
Cash Deposit fee
Admin feeAdmin fee
Bounced debit order fee
Bounced debit order fee
WithdrawalWithdrawal
-Commercial Banks-TREE OF BANK CHARGES
-Commercial Banks-TREE OF BANK CHARGES
Inside branch fees
Inside branch fees
• The historical legacy continues after 21 years of democracy to sideline the black majority to a secondary class economy while the few neoliberal capitalists’ monopoly continues to thrive through the exploitation of:
• government,
• working class,
• social grant beneficiaries,
• small and micro enterprises,
• co-operatives and so on.
• Hence the continued need for practical steps and implementation framework that pays special and urgent attention to the promotion of active economic participation in the financial services sector by the historically marginalized population groups
Skills alone not enough…
Redressing the past
“the Year of the Freedom Charter and Unity in Action to Advance Economic Freedom.
The year of going the extra mile in building a united,
democratic, non-racial, non-sexist and prosperous South
Africa.
It is also the year of rededicating ourselves to eradicate racism and all
related intolerances in our country”.
JG Zuma, President of SA
2015 State of the Nation Address
‘People shall share in the country’s
wealth, and that banks and
monopoly of industry shall be
transferred to the ownership of the
people as whole and all other
industries and trade shall be
controlled to assist the well-being of
the people’
Unlocking of the potential of small, medium and micro enterprises (SMMEs), co-operatives, as among the state’s Nine Point Plan-
•revive township and rural village economy
•millions of jobs
•eradication of poverty
•reduction of indigent households
•payment for services
•reduction of crime
•elimination of violent protests
•social cohesion and equality
•economic inclusion
•economic growth
•security and stability
Redressing the past
Chicken and Egg Dichotomy
skills
finance
= freedom to act+
formal enterprise
formal enterprise
informal enterpriseinformal
enterprise
jobs =
Chicken and Egg Dichotomy
skills
finance
= freedom to act+
formal enterprise
formal enterprise
informal enterpriseinformal
enterprise
jobs =
Running your own business means having to wear all different types of hats
What Skills Set (Enterprise Management Core Competencies)
Are Skills Alone Enough?
Show me one viable and sustainable enterprise that has made it without access to finance…
ARE SKILLS BY THEMSELVES, A
PANACEA?
A viable business-•long-term survival, and its ability to have sustainable profits over a period of time
A sustainable business-•resiliency over time – can survive shocks•connected to healthy economic, social and environmental systems
South Africa needs
viable and
sustainable
businesses to
effectively deal with
poverty,
unemployment
and inequality
Business shocks
SUSTAINABILITY systems
economic
• Ownership of the means of production
• Access to economic productive skills
• Access to affordable capital & operational finance
• Access to markets for inputs and consumers
social• Active citizenry-
political and civic levels
• Pool of people with purchasing power
• Social stability
• Absence or low levels of crime
• Healthy communities
• Skilled and have the right mental attitude to work hard
environmental
• Supporting legislative framework
• Economic infrastructure
• Political stable communities
• Environmental safe business practices
• Corruption free access to opportunities
World Council for Economic Development (WCED), sustainable development is development that “meets the needs of the present without compromising the
ability of future generations to meet their own needs.”
Supply, Demand & Skills = Viability
DEMAND
• High demand – leads to profits: – More staff– Decent salaries– Business
expansion– More state tax
contributions
• Low demand – leads to death of business– Unemployment– Loss of income– No state tax
contributions
SUPPLY
• Raw materials / inputs:– Are cheaper in
large quantities– Large quantities
reduce costs of production
• Finished goods move quicker when– They are
affordable to end users
– Accessible to end users
MARKET: individuals and
enterprises
AFFORDABILITY
•Access to finance
•Salaries/wages
•Skills
Holistic Solving the Problem ofSupply, Demand & Skills = Viability
Co-operatives Act 14 of 2005o To promote the development of sustainable co-operatives
that comply with co-operative principles, thereby increasing the number and variety of economic enterprises operating in the formal economy,
o To encourage persons and groups who subscribe to values of self-reliance and self-help and who choose to work together in a democratically controlled enterprises, to register co-operatives and acquire a legal status separate from their members,
o To promote equity and greater participation by black persons, especially those in rural areas, women, persons with disability and youth in the formation of, and management of co-operatives,
Holistic Solving the Problem ofSupply, Demand & Skills = Viability
Co-operatives Bank Act 40 of 2007
o To Promote and advance the
o social and economic welfare of all South Africans by
o enhancing access to banking services
o under sustainable conditions,
o Promote the development of sustainable and responsible co-operative banks, and
o Establish an appropriate regulatory framework and regulatory institutions for co-operative banks that protect members of co-operative banks
…‘is a group of people voluntarily united to meet their common banking needs through a jointly and democratically owned and controlled financial institution’.
It offers its members a range of financial products and services such as savings, loans and transmission facilities, while upholding collective entrepreneurship and contributing to the development of communities.
Co-operative financial institutions accept deposits and make loans. But as member-owned institutions, they focus on providing a safe place to save and borrow at reasonable rates.
Co-operative Financial Institution
Unlike banks, co-operative financial institutions return surplus income to their members in the form of dividends.
Fees and loan rates at co-operative financial institutions are generally lower, while interest rates returned are generally higher, than banks and other for-profit institutions.
Co-operative financial institutions are democratically operated by members, allowing account holders an equal say in how the financial co-operative is operated, regardless of how much they have invested in the Co-operative financial institution.
Co-operative Financial Institution
CFI Registration Documents
CFI Model
Target Market Segment for Co-operative Banks
Social Grants Recipients
Social Grants Recipients
Agriculture Co-operatives
Agriculture Co-operatives
Housing Co-operatives
Housing Co-operatives
Consumer Co-operatives
Consumer Co-operatives
SMMEs SMMEs
UnemployedUnemployed
Clubs/StokvelsClubs/Stokvels
CBO/NGOsCBO/NGOs
Indigents Indigents
CFI
Trust/CPATrust/CPA
Worker Co-operatives
Worker Co-operatives
SocialCo-operatives
SocialCo-operatives
Services Co-operatives
Services Co-operatives
Street Traders & Vendors
Street Traders & Vendors
• Access to affordable finance by traders, vendors & suppliers
• Access to affordable finance by your customers / consumers
• Improved buying power increasing demand for goods
• Lifetime affordable ownership shares in a banking institution
• Borrow and paying yourself affordable instalments
• Benefiting from profits generated
• Benefiting from business skills development, coaching & mentorship
• Living generations legacy and opportunity to be listed on JSE
• Payment for services and reduced indigent persons
What will we benefit from joining and supporting establishment of co-operative
financial institutions
Mr. Kubheka
(MD: Xololomusa Contractors)
“…I have financial freedom
and peace of mind at CEBISA
as loans are approved within
24hrs to ensure my cash flow
is able to meet my entities
debts. No red tapes, no risk
factors, no discrimination.
No joy is biggest than
knowing that the low interest
I pay comes back to me as a
shareholder”
TestimonialTestimonial
Ms. Mbatha,
(works at Msunduzi
Municipality)“I was unable to obtain car
finance due to high interest
rates from other banks. I
was called high risk, but
CEBISA came to my aid.
Today I have a brand new
pair of wheels and a
reasonably low interest fee
and still have a disposable
income for my other
needs”
Buy mandatory shares = R100
Pay application fee = R100 =
Open savings account = R200
Complete application form
◦ID Copy and those of your beneficiaries
◦Commit to monthly savings of min R100
◦Waiting period of 6 months
R 400
How to join the How to join the 402 members of 402 members of Cebisa?Cebisa?
Bongumusa Ntuli
ChairpersonCebisa Financial Services Co-operative
+KZN Association of Co-operative Financial Institutions
+National Association of Co-op Financial Institutions of SA
Cell: 071-9315952 / 072-2478017Tel: 012 -346 6020Fax: 012 -346 5891www.nacfisa.co.za
‘You may now ask questions’
Thank you for your attention