BY MBONO MDLULI
MBABANE – Swaziland Building Society (SBS) is ready to become a bank, as it now has reserves in excess of E500 million.
This was said today by SBS Managing Director (MD) Mbali Sibanyoni today (Wednesday, November 6, 2024) at Open House Hotel in Eveni, Mbabane. This was during the media feedback briefing on the society’s conversion process to become a commercial bank.
The society is in the process of converting from a society to become a bank. It has started this process more than 14 years ago, as Sibanyoni hinted that in 2012, they had started the conversion process. The conversion process will now be determined by the members of the SBS on whether they vote for or against the process.
This will happen during the Special General Meeting (SGM) that is expected to take place next week between the SBS and its members and/or customers. Once the members agree that the society could become a bank, the board and management of the society will inform the regulators, including the Central Bank of Eswatini (CBE), who will then approve, once they had satisfied themselves that the SGM went well and all stakeholders had approved.
During the media briefing, questions were raised by editors from different media houses in the country. They wanted to know if SBS had enough money to start a bank. They also wanted to know if the members of SBS were at ease will the process. The scribes also expressed concern about what they viewed as the possibility of a hostile take-over by what they termed as predatory investors.
They stated that SBS had all along been synonymous with being friendly to the poor masses because it allowed them to save the little money they had. The financial institution had been friendly to informal traders, according to the editors. They wondered if that was going to happen, now that the organisation would become a bank. They also expressed concern about the time it had taken for the building society to become a bank, stating that they felt there was some kind of unfairness from some institutions in the process.
Responding to the concerns by the editors, Sibanyoni, assisted by her management team, stated that they had reserves in excess of E500 million. However, she mentioned that there was a positive response to the members of the society. She also assured the editors that SBS belonged to Emaswati, including the informal traders and they wanted to build wealth for everyone, including the smaller business people. According to Sibanyoni, the conversion process could have taken a long time.
However, she believed that everything had its own time because all they wanted to ensure that people’s monies were protected. So if they believed that something was not ready for public consumption, it could take time. She also mentioned that they would ensure that a hostile take-over would be prevented by informing members if there was someone who wanted to buy shares of the society, when it had become a bank, and the members would decide if that person could be allowed to buy or not.
Differences between a building society and a bank
Even though sometimes these entities may be the same, they are different. They are the same in that they all take deposits from people so that their monies can be kept with those entities. In the case of SBS, we have people in this country who have banked with the society their entire lives, getting the same experience they would get from other commercial banks.
During the media briefing, one editor mentioned that SBS has Auto Teller Machines (ATMs), just like other banks. It has accounts where monies for its clients are banked, just like other banks. He further said there are foreign exchange services rendered by the institution and many workers are using the institution to get paid by their employers. The editor also mentioned that SBS also issued loans to its clients, just like other banks.
Many people will also note that SBS has been a member of Eswatini Bankers Association (EBA) for a very long time now, and it has even chaired the association, in some instances. Because of these attributes, members of the public can be made to believe that SBS is a bank, yet that is actually not the case. There is a difference between a building and a bank.
According to Yorkshire Building Society (www.ybs.co.uk), at a glance:
• A bank has customers, a building society has members.
• You become a member when you open a savings account, or take out a mortgage with a building society.
• A building society is run for the benefit of its members, instead of shareholders. Members can have a say in how a building society is run.
A building society is also called a mutual. This is because building societies were made to benefit people who either wanted to:
Save money.
Borrow money – mainly to buy a home.
The concept of mutual saving, or mutuality, goes back to the 18th century when a group of people pooled their savings to buy land and build houses.
The idea is the same today. Building societies offer savings and mortgages, to help people save for the future and borrow money to buy a home.
How members can use their voice
If you’re a member of a building society, you can vote in the Annual General Meeting (AGM). This means you can help make decisions about how it’s run and who takes certain roles in the company.
