Find Banking and Financial Services expertise in Botswana
The banking industry in Botswana has become an increasingly significant part of the economy, in its own right and in relation to the support it provides for development of other sectors. The sector has experienced solid growth – during the period 1995/96 to 2007/8 it grew in real terms by 11.3% a year on average, in comparison to overall real economic growth averaging 5.5% a year during this time. In terms of assets the banking sector dominates the financial sector, although other institutions, such as pension funds, saw rapid growth in the decade leading up to 2011. These years experienced significant positive developments which saw enhanced competition, innovations in products and service delivery, and greater choice for customers, both within and outside the banking sector. There are seven commercial banks – the Bank of Baroda, Barclays Bank of Botswana, First National Bank Botswana, Stanbic Bank, Standard Chartered Bank Botswana, Bank Gaborone and Capital Bank and one investment bank, the African Banking Corporation (2010). In addition to this there is one offshore bank, Kingdom Bank Africa Ltd, and one offshore bank holding company, African Banking Corporation Holdings, one statutory deposit-taking institution and one building society. The Botswana International Financial Services Centre (IFSC) was set up in 2003 to facilitate the delivery of cross-border financial services and enhance the participation of foreign-based financial services companies in Botswana’s economy. The non-bank financial institutions include insurers, pension funds, asset managers, credit institutions, microfinance institutions, collective investment undertakings, three statutory development finance institutions, statutory funds and the Public Debt Service Fund.
Regulation of Financial Services
The banking sector in Botswana is largely regulated and supervised by the Bank of Botswana, the central bank. Up until 2008 many other types of financial institutions were unregulated, such as ‘cash lenders’. However, 2008 saw the establishment of the Non-bank Financial Institutions Regulatory Authority (NBFIRA), which provides a regulatory and institutional framework for all non-bank financial institutions, including ones which had been previously unregulated. Additionally the Bank of Botswana plays an important role in administering IFSC regulations and regulating collective investment undertakings (mutual funds). According to the World Economic Forum Global Competitiveness Report (2012-2013) Botswana found a prominent position in relation to the soundness of its banks, placing a strong 50th in the world overall.
Development of Financial Services
In the World Economic Forum’s Global Competitiveness Report (2012-13) Botswana ranked 72nd in the world (out of 144 countries) for its availability of financial services, a solid position when compared with other countries in the Sub-Saharan African region. For affordability of financial services it placed 75th in the world. For financing through the local equity market it placed 49th, with a value of 3.9 out of 7 in comparison to the mean of 3.5. It was similarly above the world average in relation to ease of access to loans, placing 35th, only five below South Africa. In the 2011 World Bank’s Ease of Doing Business Index Botswana ranked 48th in the world (out of 183 countries) for getting credit and 46th for protecting investors.