The Minister of Finance and Economic Development, Kenneth Matambo said the ministry is in the process of drafting the credit information bill to improve access to credit by small businesses.
Presenting the budget for the Ministry to legislators on Tuesday, Matambo said as part of implementing the national financial inclusion roadmap and strategy that runs from 2015 to 2021, the ministry is in the process of drafting the bill. “The bill will seek to improve both positive and negative financial information which will improve access to credit which is extended to small businesses and citizens,” said Matambo.
He said currently, Botswana Savings Bank (BSB), which focuses on developing low cost accessible and flexible savings products for the low-income earners currently excluded from the formal banking sector, is driving the financial inclusion mandate. The bank is expected to open two more branches in Hukuntsi and Kanye this year. Matambo proposed the budget of P1. 5 billion for his ministry out of which the recurrent budget amounts to P 950 million (64.8%) while development budget amounts to P515 million (35.2%).
The Botswana financial inclusion roadmap 2015 to 2021 objective is to help improve citizens’ welfare and support national objectives.
The roadmap is based on the diagnostic findings contained in making access possible. According to the research findings by the Ministry of Finance and Economic Development published in 2015, formal access to finance stands at 68 percent. With most segments having broad access to financial services, 46 percent of adults use more than one product category including savings, credit, insurance and payments. “However, access is still a challenge in certain segments and 24 percent are completely excluded, mainly in the lower income, rural and remote populations.” Among the key findings pointed as the barriers to financial inclusion in Botswana, are low income and lack of understanding of financial products.
Botswana Savings Bank (BSB) plans to roll out Automated Teller Machines (ATMs) to several villages and towns in its drive to reach more customers and make banking services more accessible.
The state savings owned bank would launch its eighth ATM today in Kang. The launch follows recent launches in other villages and towns across Botswana, including Letlhakeng, Serowe and Francistown. BSB Chief Executive Officer, Nixon Marumoloa said the provision of financial services in areas where the bank is not physically represented is core to BSB strategy.
“The bank is continuously exploring ways to put in place distribution channels for the delivery of financial services in Botswana as a way of extending its outreach and maximizing its brand visibility,” said Marumoloa. He explained that all ATMs are VISA compliant and as a result the ATM will not only service BSB clients but other banks’ clients will also be able to transact.
Last year the Ministry of Transport and Communications formed Botswana Postal and Savings Group (BPSG) company whereby all shares in Botswana Postal Services and Botswana Savings Bank following conversion from statutory entities to public limited companies under the Companies Act, would be held as the 100 percent shareholder.
This was followed by a directive to amalgamate Botswana Post and Botswana Couriers and Logistics into a single entity. The Directive also instructed that BSB be transferred back to Ministry of Finance and Economic Development (MFED). BSB will now partner with the amalgamated entity, BPSL to provide financial inclusion to communities that are unbanked. This will lead to the dissolution of the holding company, BPSG.
The fourth edition of the Desert Bush Walk: Winter 2018 is slated to take place on July 28. The event that promotes sports tourism and raises funds for charitable causes has also drawn interests from over 2 500 participants. There is still some space left for last minute ticket buyers as the deadline has been extended to July 1 from the initial date of June 15.
This year, the popular event has drawn the interest of three chief walkers who are cabinet ministers: Alfred Madigela, Unity Dow and Thapelo Olopeng.
Speaking in an interview with event organiser, Archibald Ngakayagae, he explains that preparations are going very well and that everything is on track. He also says that they are still working on getting more sponsors and trying to address the issue of shortage of accommodation in Jwaneng.
He also emphasises that their number one aim is to raise enough money for the chosen projects that are to benefit. Last year alone, they raised over P235 000. Close to 13 schools including primary and pre-schools in the following areas benefitted: Kokong, Sekoma, Kanaku, Mokhomba, Morwamosu, Khakhea, Khonkhwa, Itlhoko, Maokane, Thankane, Tsoanyane, Jwana, Kgalagadi and Sese. They received teaching aids, computers as well as money for sport development and the completion of a classroom.
Every year, Ngakayagae explains that they start on a clean slate, and that they sit down with the Ministry to discuss the needs of the schools in their area.
Sponsors who are already on board include Mokala lodge, MRI, Patmo Transport, Liberty Life, Botswana Savings Bank, BTC, BAMB, Letshego, Botswana Guardian, Sunday Standard, Carly Clothing, Duma Fm, Botswana Oil, Puma Energy, Majwe Mining, Matseka Printing, Pick n Pay (Jwaneng), webtickets, NT4 Engineering, as well as Davebouy Worx. More sponsors are however, still welcome.
This year, they have ticket sales in Rustenburg, Johannesburg, and Lesotho. “We have large support from outside the country, hence we have these ticket sales,” he explains.
Bank of Botswana this week reiterated its earlier response that it supports the creation of indigenous commercial banks in Botswana.
This comes hot on the heels of Barclays plc transaction which cemented South Africa’s vice-like grip control of the multi-billion Pula banking industry in the region.
The country currently has ten commercial banks and three statutory banks being Botswana Savings Bank (BSB), National Development Bank (NDB) and Botswana Buildings Society (BBS).
All the ten commercial banks are in the hands of foreign investors, with the most value attributed to South African-owned banks. “Like everyone else, we (BoB) welcome an indigenous bank. However, it is important to note that, we are tasked with ensuring the banking industry is safe and sound,” the central bank Governor, Moses Pelaelo old the press on Tuesday.
He was responding to questions from business reporters after Barclays plc disposed part of its shareholding to Barclays Africa, in a transaction which was exclusive to South African investors. Barclays Africa owns Barclays Bank of Botswana. This effectively means Africa’s most advanced economy is the biggest investor in the lucrative banking sector.
Pelaelo stated that, even though there are no citizen-owned banks, it must be appreciated that some of the commercial banks operating here have listed part of their shares at Botswana Stock Exchange (BSE). This platform has given locals a chance to own shares in the different banks which are listed such as First National Bank Botswana and Standard Chartered Bank Botswana.
Over the years, some local investors have tried, but in vain to gain entry into the multibillion Pula sector which is half of the country’s Gross Domestic Product (GDP), after the central bank rejected their applications. Letshego Holdings Limited is one such unfortunate applicant whose application was put on ice for undisclosed reasons.
According to the central bank Governor, ‘two or three’ companies have applied to be licensed as commercial banks in the past few years. Pelaelo made it clear that, most of the applications were turned down on the aspect of ‘strategy versus resources’ and not necessarily financial.
P5 million (less than $1 million) is needed to start a bank in the landlocked-country where banks are competing to service a population of more than two million. The banking sector’s profitability over the years has increased despite rising competition and weak economic performance.
The BoB annual report for 2016 shows that overall balance sheet of commercial banks climbed by 5, 2 percent from P76, 7billion in 2015. Loans and advances for the same year (2016) also jumped by 5, 7 percent to close the period under review at P49, 7billion.
Pelaelo added that not all profits from these banks are moved out of the country as there has been notable investment by local banks in the domestic economy. On a related matter, BoB has kept the lending rate at 5, 5 percent, for the third time this year. The decision was taken by the bank’s Monetary Policy Committee (MPC) this Tuesday.