1. Department of Small Business Development
COOPERATIVES BANKS DEVELOPMENT AGENCY
Presentation to the Portfolio Committee, 20 February 2018

2. TABLE OF CONTENT
CBDA Mandate
Challenges and Solutions
Way-forward

3. CBDA MANDATE Liquidity Support – Stabilisation Fund
Supervision and Regulation
Capacity Building and Development
Liquidity Support – Stabilisation Fund
Co-operative Banks Act of 2007 (as amended)
Banks Act Exemption Notice 620 of 2014
Co-operatives Act of 2005 (as amended)
National Credit Act of 2005

4. CHALLENGES AND SOLUTIONS
Partnership between DSBD and National Treasury (CBDA)
CHALLENGE
SOLUTIONS
Lack of participation National Payment System
Fast track the use of technology (Banking Platform Project must be fully funded)
R10 million invested – sefa )
Low adoption of technological banking systems
Restrictive common bond that undermines growth
Amendment of the Cooperatives Bank Act of 2007 as amended
Regulatory burden making compliance cost very high
Cooperatives Banks and CFIs are seen as inferior
Establishment of the National Cooperatives Banks – capitalize through fiscus and member savings
(DSBD support initiative)
Lack of innovation to develop appropriate financial products

5. CHALLENGES AND SOLUTIONS
Partnership between DSBD and National Treasury (CBDA)
SOLUTIONS
ACTIONS
A deposit insurance fund for CFIs and Cooperatives
Establish a deposit insurance fund for the CFIs (to be incorporated with the one for large banks)
Amendment of the Insurance Legislation
CBDA requires funding for CFIs and budget for Capacity Building support services
CBDA Budget increased from R20 m to R100m
Cooperatives Banks Development Agency – Stabilisation Funds to assist with liquidity challenges
Budget should be increased from
R 1.5 million to R 5 million

6. CHALLENGES AND SOLUTIONS
Partnership between DSBD and National Treasury (CBDA)
SOLUTIONS
ACTIONS
Fast track the establishment National Cooperative Bank
Develop National Coops Bank strategy;
Amend the Coops Bank Act, 2007;
Channel government funding for SMEs and Co-operatives via the CFIs;
Shift perception than coops banks are for the poor.
Finalising the Banking Platform
More funding is required from the fiscus – DSBD support
Cooperatives Banks Development Agency (CBDA – capacity building) to be merged with Cooperatives Development Agency (CDA) – DSBD support the position – engage NT accordingly
CBDA supervision unit moved to SARB on the 9th of October 2017

7. WAYFORWARD Development of the Cooperatives Banks Strategy;
Amendment of the Cooperatives Banks Development Act, 2007;
Establishment of the National Cooperatives Bank;
Finalising the Banking Platform
CBDA and CDA to merged – given the transformation taking place.
Establish a deposit insurance fund for the CFIs

8. Thank You