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Johannesburg - VBS Mutual Bank, which shot to fame after giving President Jacob Zuma a loan for his Nkandla homestead, has inked a new deal with a cross-continental church as it eyes bigger business.
VBS has signed a deal with one of the country’s biggest churches, Twelve Apostle Church in Christ (TACC), to be their official banker. The church claims to have 6.8 million members.
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VBS CEO Andile Ramavhunga said it will be in charge of the church’s funds, including investment opportunities.
The bank is also looking to sign on individual church members as clients.
“Part of the services to be rendered by VBS to the church will include the implementation of a membership banking card solution to the church’s 6.8 million members that will be banked as of today," Ramavhunga said.
The deal is part of their expansion plan to position VBS Mutual Bank as the fastest growing black owned bank in the country.
“We are confident that our partnership with TACC will see us growing as we roll out the strategy and we will be represented in all nine provinces,” Ramavhunga said.
Chief apostle of the TACC, Caesar Nongqunga, said the church decided to sign off with VBS after years of being frustrated by the bigger financial institutions whom he accuses of making it impossible to access loans or bonds.
“As a church we need an established bank, if you want to buy a church using a bond, the bank would deny us hence we partnered with VBS to enhance life of communities,” Nongqunga said.
He said the church is operating in 28 African countries and is represented in four continents. Both the bank and the church insist members will not be compelled to join the bank.
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“We want all the 6.8 million members. I won’t be ashamed; I want all of them,” Ramavhunga said.
The new deal could boost VBS which is looking to expand nationally. It says it currently has 30 000 clients and is looking to open new branches and increase its 100 member workforce.
“If you are asking us if we have capacity to do six million clients - I will say yes. Our systems are robust enough; they have been tried and tested,” Ramavhunga said.
The deal will see members initially given church branded affinity bank cards, with the hope they will switch to VBS to access other services including transactional accounts, bonds and other loans.
Zuma home loan
VBS, which has been synonymous with having most of its clientele in Limpopo, grabbed the headlines last year when it gave President Zuma a loan to finance the R7.8m he was forced to pay back by the Constitutional Court for non-security upgrades done at his home.
The bank said it plans to focus on growing its footprint among those excluded by mainstream banks.
VBS Mutual bank said it has R300m in share capital and R800m of household deposits including from walk in clients in branches.
