Cooperative drives change, land rumors and reform, NYQM and upcoming events!
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Driving Change Together
In Focus readers will remember the innovative Sihlangene Bus Company in Richards Bay, KwaZulu-Natal, organized when two taxi cooperatives (Nhlabane and Mbonambi) entered into an agreement with the black-owned Trans-Tugela Bus Company. (“Sihlangene” means “We are Together.”) When I visited the company in August, Sihlangene had already progressed to the next stage of its business evolution. Having received a loan for ZAR 25,093,168, with the help of a Shared Interest guarantee of ZAR10,000,000, the company purchased the 24 buses it needed to service the rural route awarded by the government. The program is part of the transportation transformation plan to bring peace (in a region formally plagued by taxi wars), security and inclusion to the industry.
“The real difficulty was in the beginning,” recalled Florence Gumede. Sihlangene needed credit to buy busses to deliver the services required. This was not easy. “Nobody wanted to touch us,” she explained. “All we had was the contract.” Help came in the form of Shared Interest’s guarantee for 37.3 percent of the loan. In addition, the bank required security from the Gumedes’ company Trans-Tugela. “My husband had to go to the bank,” Florence added. “He stayed the whole day, signing paper after paper to show he would be a guarantor. They said they couldn’t approve the deal without his signatures. I had to take him food.”
“Without those guarantees,” said Florence’s daughter Mpume, “Sihlangene was not going to kick off.”
Ahead of Schedule
After only two years in operation, Sihlangene had worked with the lender (ABSA Bank) to secure permission to repay its loan in three years instead of the original five – and is now looking to repay it even earlier. The company has already repaid R17 million of the original R28 million loan. Not only is the business doing well, but Sihlangene is looking to rid itself of its interest charges. Moreover, as the business flourished, demand soared. “The buses were overloaded, as the communities have grown, and requested more service,” noted Mpume Cele, the company’s young administrator. And so Sihlangene needed to purchase four more (second hand) busses. It was able to do so with a Standard Bank loan at a 9.5 percent interest rate – without a guarantee. Sihlangene has become “bankable.” Mpume maintained that one of the keys to Sihlangene’s success has been to have a common goal. “Why fight,” she asked, “when we can work and succeed together…our long-term goal is to obtain more routes, more contracts and jobs for our communities.” The two taxi associations and the bus company service the same rural areas – providing clients with different transportation options. They pool their profits, which in turn pay participants dividends.
In two short years, the company has provided far-flung rural communities with safe, affordable transportation to work, school, and urban areas for the first time. In April, Sihlangene reported 108,750 bus fares. In June (when there were fewer holidays), the number rose to more than 132,000.
Women in the Drivers’ Seat
The company is also beginning to create precedents and a platform for the generation to come.
“We would like to see women becoming leaders in the taxi industry,” reported Lunji Shandu, a 32-year old Nhlabane Cooperative member (and mother of a seven-month old baby and a thirteen-year-old). “We want to create opportunities, and change people’s perception of the business.”
The Nhlabane Cooperative’s 45 members include 18 women, of whom three inherited the businesses from their parents, and two from their husbands when they were widowed. The others were actively recruited from the community when the coops were formed.
Mpume recognizes the opportunities for young people “Today it is not like it was when I was growing up in a taxi family,” she reported. “There was a lot of violence, and sometimes we had to hide. Now it is smooth and safer than before. And there is money in transportation. The nice thing, in the taxi industry, is that there is cash every day. But you also need to save and invest to grow.”
As Sihlangene’s manager, Mpume (age 32 and mother of children ages six months and three years) reflected on her own growth. “I’m a young woman – younger than nearly all of my staff,” she observed. “And now they give me respect. You can’t expect respect unless you give it.”
Lunji reported that her 13-year old son tells her, “Mommy, you are very strong.” He also likes the idea of cash, and sees possibilities for himself in the business, hoping one day to follow in his mother’s footsteps.
San Francisco Screening of "Have Your Heard From Johannesburg: Oliver Tambo"
On July 12th, 2018 Shared Interest held a premiere film screening event of Have You Heard From Johannesburg: Oliver Tambo at the Museum of the African Diaspora in San Francisco, CA. This Emmy-award winning eight-part series was our special tribute to the architect of the international anti-aparteid movement and one of the intellectual authors of South Africa’s 1996 Constitution. The film screening was followed by a talk-back with film maker Connie Field and film editor Greg Scharpen, and special reception. This event could not have happened without the generous participation of our Host Committee, Justice Albie Sachs (activist, Executive Producer to the film and author), the Museum of the African Diaspora, and Radio Africa Kitchen. Stay tuned for more information about where we will feature the film next!
Donna Katzin and Leslie Watson from Dignity Health
Investor Spotlight - NYQM - New York Quarterly Meeting of Quakers
“We make decisions by consensus,” Keefe notes. “Quakers call it unity. Unity was easy to obtain with this investment. And Shared Interest is our first international investment in the last five years.”
Diane recently chaired the investment committees of the American Friends Service Committee (AFSC) and the New York Quarterly Meeting of Quakers (NYQM). NYQM just made a $200,000 loan to Shared Interest’s Guarantee Fund after Keefe recommended it to her investment committee. “We were attracted by the ability to help reverse the legacy of apartheid, and to support women-centric businesses, climate adaptation and sustainable agriculture. This also helps diversify our portfolio while helping small businesses in Southern Africa address the risks of climate change.
Quakers came to consensus 100 years before the Civil War that slavery was an abomination. Some held slaves, while others went to their brethren to convince them that no person should be owned by another person. For decades, Quakers have avoided investments in alcohol, tobacco, gaming, military contractors and nuclear power plants. Recently, the AFSC modified its investment policy statement and divested from fossil fuels and reinvested in renewable energy. Keefe considers this climate action as the most significant outcome of her six years on the AFSC investment committee.
“In the 21st century I believe Quakers will look more positively at organizations like Shared Interest,” Diane observes, “that invest in outcomes we like.”
Diane observes, “that invest in outcomes we like.” Diane concluded, “Quakerism is predicated on the equality of all people – people of different races, economic circumstances, genders. It is not about going to church. It’s about living your life, loving your enemy, including people with whom you’ve had a major dispute. Most Quakers have tried to have their investments reflect those values. Shared Interest provides us with one important opportunity to walk our talk.”
“I saw the difference that divestment made in South Africa,” Keefe recalls. “Many of us were motivated by the legacy of Nelson Mandela and – beyond protesting what we don’t want to see – investing in what we do want to see – in line with community and impact investing.”
She recalls that as a “financial aid kid” at Wellesley, when she first heard about stocks and bonds, she asked herself whether the companies’ behavior was responsible. After obtaining her MBA and a CFA, she pursued a career on trading floors and in socially responsible portfolio management, with a focus on fixed income, notably corporate bonds. She is committed to the “three legs of the social investment stool”: 1) shareholder activism, 2) portfolio screening, and 3) proactive investment in high-impact organizations like Shared Interest.
Over more than 20 years, Shared Interest has only lost $1.8M of $28M of guarantees that have unlocked $121M in loans – and no investor has lost interest or principal. “That’s a track record that we were comfortable with, as fiduciaries,” Keefe said. “Moreover, the organization’s board members from the socially responsible investment industry, and its staff, speak to Shared Interest’s integrity, longevity and dedication to South and Southern Africa.”
From the Executive Director: Land Rumors and Reform
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August 23, 2018. When I stop to buy a newspaper at the airport before boarding the plane, the cashier asks me where I am going. “South Africa,” he exclaims, “Isn’t it terrible about all the white farmers being killed!” I say I have worked in the country for some time, and am not aware of any spate of farm violence. “You’ll see,” he admonishes. When I get to South Africa, I discover the source of the rumor: a Trump tweet.
The country was abuzz with the international disinformation, which I soon find out was informed by a CNN interview with representatives of AfriForum — a conservative Afrikaaner organization deeply concerned about moves to clarify Section 25 of South Africa’s 1996 constitution, which allows for land expropriation without compensation. Fears of “Zimbabwe-style” expropriation have shaken some white landowners and sent lobbyists to demand international pressures on President Ramaphosa and supporters of deepening South Africa’s land reform. Indeed the “willing-seller-willing buyer” approach that allayed fears property would be radically redistributed in 1994 has failed to reconfigure the apartheid geography carved into the country’s land. The lead-up to South Africa’s elections in May 2019 elections has amplified calls to put more teeth into South Africa’s land redistribution strategies.
The International Monetary Fund (IMF) has supported South Africa’s land reform plan, with the proviso that it be carried out in accordance with the Constitution. A recent report by EXX Africa, a business risk intelligence company, predicts that reforms would first prioritize idle land owned by the state for urban low-income housing, as well as idle farmland to repurpose for productive agriculture. Urban land restitution has proved to be a priority, given the low-income housing backlog in the wake of apartheid era Group Areas Act. Of the roughly 80,000 land restitution claims lodged to date, 70 percent have been urban and 30 percent rural.
Impact Report as of June 30, 2018
Next Generation Jazz Reception Tuesday, October 2, 2018 in Chicago, IL
Have You Heard From Johannesburg: Oliver Tambo Thursday, November 15 , 2018 at CUNY School of Law
Next Generation Jazz Reception Thursday, December 6, 2018 in Venice, CA
Books Signing of “Mapping My Way Home” by Stephanie Urdang Sunday, December 9, 2018 in Boston
For more information about our upcoming events, contact Shukura Shears at 646-442-0185 or email email@example.com.