On an annual basis, trillions of US dollars exchange hands electronically through various e-ecommerce platforms. These transactions mostly happen between buyers and sellers who are often thousands of miles apart.
For decades, banks have been at the forefront of ensuring both clients and sellers get the best form of services available, no matter the distance that separates them. In Botswana, Rand Merchant Bank Botswana has found it fitting to be part of this all-important payment platform called e-Commerce. RMB is a division of Botswana Stock Exchange listed lender, First National Bank Botswana. The latter is a subsidiary of FNB, a JSE listed banking giant.
Within RMB Botswana, there is no other person to explain better this eCommerce platform, other than Onalenna Bhunu. He is the bank’s Client Implementation Manager. In this interview, he started by explaining what they do within e-Commerce structures. “We basically act as conduit between the client and our MS ecommerce offering. We are that connecting piece between the two, both from a sales and support perspective,” said Bhunu, adding that, their main focus is spread into understanding customers’ needs, engaging various stakeholders, “that are key in the value chain as well as ensuring product delivery in line with clients’ requirements.”
Bhunu, who has an Msc in Strategic Management (University of Derby) explains why RMB has found it necessary to be part of this concept of e-commerce. “As a Corporate and investment bank, we bought onto this concept as a value adding service towards our clients and at the same time making lives for the end users like you and me an easier one,” he explained and further that, e-Commerce, in addition, offers customers a value adding service that facilitates towards consumers a more convenient way to shop for products or services they need anytime and anywhere. RMB has been able to come with tailor-made solutions to take advantage of this consumer behaviour.
“The customers shift to mobile devices and online participation has meant this is a key strategic initiative for clients that wish to gain a competitive edge. We note that this trend is only gaining momentum especially for local services and products and thus customers that take steps now will definitely be winners later,” he added.
Most, if not all services within e-Commerce, are done electronically. This basically means physical interactions are limited. Bhunu, without giving specific figures explained to Botswana Guardian that, there has been a surge in the usage of e-commerce during COVID-19 pandemic. He noted, this surge has helped companies and individuals to do business remotely, especially during lockdowns and restricted movements. “E-commerce has the ability to ensure the economy continues to run even with restrictions in movement. This is because it allows for trade to proceed between parties thereby ensuring continuity in some of the sectors driving the economy. It has brought in the ability for businesses to reach more customers than traditional retail reaches. With so many people making their purchases online, it is the fastest-growing retail market,” he said as a matter of fact.
Global statistics support Bhunu’s assertion on eCommerce as the leading and growing retail market. Available statistics show that, in 2020, retail e-commerce sales worldwide amounted to 4.28 trillion US dollars and e-retail revenues are projected to grow to 5.4 trillion US dollars in 2022. “RMB has always embraced the e-commerce journey and for that we have over the years developed products and our systems to support this. The bank offers both off the shelf products and bespoke solutions tailored according to our client’s needs. We also offer different plug ins for the payment gateway which include websites, App and USSD platforms,” he disclosed.
Transacting online also has its own risk, hence Security is of critical importance. Bhunu explains that they are well aware of these risks, and revealed why they have water tight systems in place to guard against possible fraud. Some of the key features that the bank has put in place is card holder Security which includes authentication of the transaction when making a purchase and secondly, RMB has ensured there is security for the solution at large against hackers which includes protection of information entered onto the platform. The bank also keeps to PCI standards, which is high level security of card association. .
The e-Commerce market is set to grow exponentially in the coming years, as more and more consumers transact digitally. “From Botswana perspective we anticipate growth within this space due to the ever-growing mobile usage in the country. This trend however, has moved in leaps and bounds in other parts of the world, specifically driven by the current co
FNBB has announced a three months cash-flow relief intervention for both retail and commercial customers impacted by COVID-19. The bank’s Chief Executive Officer, Steven Bogatsu said customers with a good track record will be eligible for the relief intervention.
“SME businesses with an annual turnover up to P10 million and an initial loan amount not exceeding P5 million will benefit from our installment relief programme,” said Bogatsu. Bogatsu said installment relief for retail customers have been put in place for those on home loan, personal loan and WesBank loans products while SME customers’ relief will be on commercial property finance, vehicle and asset finance and term loans.
In addition, FNBB has highlighted that between the months of May and June, FNB App payments, mobile payments and Cash@Till fees will be offered at a 25 percent discount on the current fee. “The bank hopes that these measures will help ease customers’ financial constraints until things stabilise,” said Bogatsu. The bank has also removed rate payments on some of its digital banking channels.
Economists have expressed contradicting views on Botswana’s economic performance for the rest of the year. However, what is clearer about their opinions is that while the economy might exit troubled waters experienced in 2016, it will not expand by what has been projected by government. This will further put pressure on government which faces an expanded budget deficit, rising numbers of the jobless due to closure of mines as well as increased budget for social safety programmes.
Minister of Finance and Economic Development, Kenneth Matambo and his boss, President Ian Khama have forecast that the mineral-led economy will increase at a rate of 4, 1 and 4, 3 percent during their budget and state of the nation address speeches last year. In particular, treasury minister Matambo based his predictions on the recovery of the mining industry which had sunk the economy into a technical recession for the first half of last year. “At First National Bank Botswana (FNBB), we forecast a lower growth rate of 3.3 percent for 2017, slightly higher than our forecasted growth of around 2 percent in 2016 and much lower than the forecasts from the ministry of finance and economic development,” said FNBB research manager and economist, Baboloki Sebabole.
A cut in rate growth puts the landlocked-country in the spotlight as this means reduced revenues, budget deficits in the coming financial years as well as poor ratings from credit rating agencies such as Moody and S&P. Moreover, World Bank has already slashed the country’s growth forecast for 2017, citing weak commodity prices. The Washington-based company which offers credit to developing nations made the revelation in a yearly report, which also painted a gloomy picture for the Sub-Saharan region, which Botswana is part of.
The FNBB economist, who is a former finance lecturer at the University of Botswana (UB), has also forecast subdued economic expansion in the medium term. “We remain cautiously optimistic on medium-term growth prospects with our forecasted average growth rate of 3.8 percent to 2023 (compared to the Ministry of Finance and Economic Development’s forecast of 4.4 percent to fiscal year 22/23),” commented Sebabole. “We believe that attaining these growth rates would require an acceleration in FDI in Special Economic Zones and more efficient management and delivery of projects through much-anticipated public private partnerships (PPPs). Furthermore, subdued private sector employment prospects and the freeze on government headcount will also continue to constrain growth in household consumption, with consumers also pressured by high levels of debt,” he said.
Government has established Special Economic Zones Authority (SEZA) which will be responsible for establishing special economic zones around the country that will leverage on specific resources that are found in those regions. Investors in the region will be given preferential treatment when it comes to taxes, company registrations and other incentives. Head of Research at Motswedi Securities, Garry Juma said there are several factors which are going to make ‘the year tough for us’. Top in the list is the closure of BCL mine which had more than 5000 employees under its belt. The mine and its subsidiaries have been closed due to factors within and outside their sphere of control such as the weak commodity prices. BCL liquidator, Nigel Dixon Warren this week told reporters in Selibe Phikwe that there is no way the BCL mine could be saved from the dead. It will be sold by winter, either after being stripped or being sold as a whole. Suitors are already knocking on the office door of minister responsible for minerals, Sadique Kebonang with a view to acquire the assets of the closed mine and its subsidiaries.
As a mineral-led economy, Botswana depends on minerals such as copper to survive. The closed mine basically means revenue from its copper and nickel exports have been reduced to zero. “Challenges to growth in the current year may stem from base metal pressures (copper and nickel); low consumer spending; low business confidence and global demand dynamics,” added Sebabole.The domestic economy contracted by 0, 8 percent quarter on quarter for the period to September 2016. This is according to data released by Statistics Botswana two days before last Christmas. However, Sebabole is optimistic that the good times are here for the economy as diamonds, the biggest export revenue earner have bounced, possibly for good. “Diamond sector improved in 2016, with year-on-year sales increasing by over 30 percent and we expect the momentum to remain positive in line with global prospects of more stable currencies, recovery of major economies like the US – which will be supportive for diamond demand,” said Sebabole in response to Botswana Guardian questions on Wednesday.
Chief Executive of De Beers, Bruce Cleaver on Tuesday told site holders that for the industry to grow there must be increased collaboration by players. “We have made some good steps in this direction, with greater collaboration across the value chain to stimulate demand, to share industry insight and to support pipeline efficiency. But we must continue on this path and increase the impact of our combined efforts to grow industry value,” said Cleaver, who is in his second year of leading the world’s biggest diamond producer by value.
De Beers sells Botswana’s diamond abroad. While Sebabole is optimistic of the diamond recovery, Juma is of the opinion that there is ‘too much uncertainty He cited the somewhat unpredictable relation with China, the world’s second biggest economy. “When bulls fight, it is the grass that suffers,” he explained. Elsewhere, there appears to be good news coming from the agricultural sector, which is likely to post improved output as a result of below average rains experienced in the past weeks. “Improvement in rainfalls might alleviate droughts,” stated Sebabole. Botswana has experienced droughts in recent years which necessitated bigger budgets for social safety programmes across most sectors of the economy.
Juma said that even if the agricultural sector will improve, ‘its contribution to GDP will still be little’. The sector contributed 1, 7 percent of total Gross Domestic Product in the three months to September 2016(Q3: 2016). The improvement in agriculture will lead to increased supply in grain, both Sebabole and Juma agree. Manufacturing- cited among sectors that can lead the economic diversification drive - has improved from 0,4 percent in the second quarter of 2016 to 1,7 percent in the quarter to September last year.
“Manufacturing has the potential to be boosted by several initiatives like AGOA, but will be dependent on accelerated implementation of policies that are favourable for the sector’s prospects to make it more competitive in real terms,” said Sebabole.
First National Bank of Botswana profits for the year ended June 30th will be lower when compared to the year before, the company said on Wednesday afternoon.
The lender, a trailblazer in mobile and internet banking platforms, did not disclose the decline in profits either in percentage or numerical terms. “Although still lower than the previous corresponding reporting period, the performance is improving and showing an upward trajectory,” said the BSE listed lender a filing to the regulator.
The bank, which is led by Steven Bogatsu made a profit of P591 million for the year ended June 2015, down by 18 percent when compared to the year before. FNBB, which is a unit of First National Bank, South Africa’s banking giant, has not stated reasons for the fall in profits this time around.
However, its peers who have already released full year results have complained of low rates regime and two year moratorium on bank charges among others. The bank said the results are expected on or before August 25, 2016. Shareholders have been alerted to exercise caution when dealing with the company securities before the results are published.
Every once in a while, we (including media workers) all need that me time when one just finds a corner or a space to unwind, shut out the echoes of modern life and its many challenges. And there comes a time when walking through the welcoming walls of a spa, one is soothed by the whiff of flowers.
Or better yet, how about just curling in one of the chairs in a relaxation room, drinking that calming tea and just going to sleep without worrying about whether a deadline has been met or where you will find your next source of inspiration for an overdue report.
Enter Camelot Spa, a haven that takes one straight to paradise. Tucked away in a little corner on the grounds of Grand Palm Hotel, Camelot ticks all the boxes of a top class spa facility. On Wednesday morning, a select number of media practitioners walked into the heavenly Spa. The event, hosted by First National Bank in collaboration with Camelot Spa, marked an exciting milestone for FNB’s private Clients. FNB Black Credit Card Holders can now look forward to an array of treatments from the spa. The media workers got to walk through the Spa, to get a feel of what the Black Card Holders would experience.
The exclusive package gives Private Clients who are Black Credit Card Holders access to specialised treatments at a 15 percent discount. According to Boitumelo Mogopa, First National Bank Botswana (FNBB) Director – Retail, the innovation is a token of appreciation for clients who have remained with the bank over the years. “Our clients are very dear to us, and they have trusted us as their banking partner over the decades we have been in business,” she says. This value-add is another important way they wish to bring more to their clients’ experience beyond their everyday banking.
“We are more than just a bank, we are our clients’ partners in life and we hope this added benefit will allow our clients to feel the quality pampering they so need and deserve,” says Mogopa. The Camelot Spa Brand Ambassador, Tshepo Ntshole notes that the Spa is delighted to see the partnership with FNBB come to fruition. “We are very excited to have partnered with such a leading entity as FNBB. As Camelot Spa we jump to opportunities that allow us to provide new ways to pamper our clients. We provide a generous variety of treatments that we hope FNB Black Card holders will enjoy with each visit,” she says.
Trust this reporter when she says that Camelot Spa is one of those places that when you walk through, you wish you will never go back home. Having previously enjoyed a relaxed afternoon, where one got to have the stress knots and her body getting the royal treatment it was a pleasant experience to return to the Spa, and window shop for some of the packages and treatments that one can look forward to, for next time. Clients have the opportunity to experience the recently introduced Vichy Shower that promises to be a hit with clients. The Vichy Shower works in collaboration with a massage and wrap, and for those who are under a lot of stress, they can just enjoy the soothing caress of the water on their bodies. It will be available before the end of the year. Something else that clients can enjoy, couples for that matter, is the Bali Spa Journey.
This was a treatment that was once reserved for a Princess, 40 days before her wedding. It begins with a ritual Balinese Body massage, followed by an invigorating scrub. Next up, would be a luxurious bath/shower that ends with a moisturising session with a fragrant lotion. This treatment is also available to couples. In the coming weeks, clients of Camelot Spa and new ones can look forward to two events. These include the Ladies night that will see women enjoying some drinks, food and pedi’s and meni’s. For the gentleman, they can look forward to the Throwback Thursday which will include a massage, and enjoying some enlightening conversation over a glass of whiskey.
A decision by the Monetary Policy Committee (MPC) to slash key lending rate is a blessing for customers while commercial banks are already experiencing profitability challenges - will take a further knock. This is the general view from analysts who spoke to Botswana Guardian on Wednesday, days after a closed-door meeting of the MPC voted in favour of a rate cut from 6,5 percent to 6 percent.
The decision to cut the bank rate ‘is good for consumers because the interest they pay on their loans from commercial banks will be reduced, an investment Analyst Karabo Tladi of Black Thread Capital said on Wednesday afternoon. In theory lower rates are supposed to encourage consumer spending, said the analyst. “In other words consumers will spend more rather than save more because there is little interest to receive from their savings,” he stressed. Spending by nature drives up inflation. On another point, Tladi said that some consumers who previously did not qualify for certain loans might qualify. “Consumers can now get mortgages, buy cars and improve their standard of living,” he added.
However, Tladi warned this might be inflationary in a long term if the rate goes out of the BoB’s objective range of 3-6 percent. Another financial commentator, Tlotlo Ramalepa who is a research analyst at Motswedi Securities said the development is a positive move for consumers. This is because they (customers) will get loans at relatively cheaper rates, as banks are expected to cut rate accordingly. Banks such as Stanbic have already followed suit by adjusting rates downward accordingly. Ramalepa pointed out that the private sector also stands to benefit because they will seek cheaper funding for business expansion and create employment and contribute to the economic growth of the country. The economy is expected to grow by around 5 percent this year. However, some commentators are doubtful of this since the main cog of the economy - mining industry - is blowing hot and cold.
The benefits that consumers will enjoy on the backdrop of the rate reduction, is not going to be enjoyed by the banking industry, which is half the size of the economy. The banks are hoping for more profits, especially coming from a liquidity squeeze, which nearly brought the industry to its knees. The central bank revised the primary reserve requirement in April this year. “Rates are now at the lowest in more than 20 years. Banks like Barclays which interest income makes a big portion of their total income from operations will be affected more than others like FNBB (First National Bank Botswana) which has been very innovative and as a result generate a big portion of their income from non-interest income,” said Tladi.
“This (decision to reduce bank rate) will also discourage savings at the time when the banking sector is facing liquidity challenges. If rates are low, people will rather invest their money to buy shares and other investment vehicles rather than saving the money in the bank because the returns they get are very small”. Ramalepa said that the move might bode ill for the banking sector as they may get low interest income due to low net interest margins. He said that this will also affect bank’s profitability. It remains a matter of speculation if banks will continue to implement tight credit policies, in a bid to limit instances of defaults by some customers. That was the trend before and after a P2, 3billion lifeline that was extended to banks, as a result of liquidity squeeze caused by limited cash. The current challenges in the industry continue to affect banks’ profitability.
A leading lender has already taken a bite. FNBB this week notified share shareholders that the lender overall performance to be reported for the financial year ended 30 June 2015 is likely to be lower than the corresponding year ended 30 June 2014. By reducing the lending rate, the MPC is going the opposite direction to what other central banks in the African continent are doing by raising interest to bolster their respective currencies. Such countries include neighbour South Africa, Kenya and Ghana.