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JOHANNESBURG. — After more than a decade of South Africa’s biggest banks not having to face fresh competition, new rivals are stacking up.

The latest entrant, the Young Women in Business Network Cooperative Financial Institution, is now seeking to become the country’s first bank to be owned by women by converting from being a cooperative institution, which can only offer services to its members, Managing Director Nthabeleng Likotsi, 33, said by phone.

It will target informal traders and black business owners who have been shunned by traditional lenders, she said.

YWBN joins at least three other companies planning to challenge the nation’s five top lenders, including FirstRand and Standard Bank.

Between them, those banks control more than 90 percent of banking assets and dominate the local landscape, with ATMs and branches littered all over the country, offering everything from savings accounts and credit cards to business loans and private wealth management services.

“Competition is healthy and we strongly believe this country needs to have more banks,” Likotsi said. “Banks don’t understand black entrepreneurs. Power is sitting in the informal sector, which has not been fully activated, and banks are not giving it their full attention.”

After an 11-year absence of new commercial-banking licence applications, the regulator has approved two in the past year and one provisional licence: Discovery [JSE:DSY] plans to start a service within months aimed mostly at middle- to upper-income earners.

TymeDigital, backed by Commonwealth Bank of Australia and local billionaire Patrice Motsepe, will allow customers to access funds through mobile phones.

Bank Zero, co-founded by the former chief executive officer of FirstRand’s First National Bank, plans a digital offering that will encourage savings.

YWBN is hoping to set itself apart by targeting individuals who fall outside of the formal economy, such as self-employed hawkers and minibus taxi drivers, as well as community-based savings pools known as stokvels, said Likotsi. — Fin24