Thursday, November 30, 2023

BoB ex-boss Mohohlo’s whisper of advice from the sidelines

Former Bank of Botswana (BoB) governor Linah Mohohlo says it is important that banking business decisions relating to the day-to-day operations of financial institutions are tailor-made for the needs of the country.  

She said while mentoring and advisory services are not discouraged, routine referrals for decision-making to the regional office or headquarters can only undermine the course, as well as entrench the dearth of banking skills available domestically. 

Speaking recently at the First National Bank Botswana’s (FNBB) 25th anniversary, Mohohlo stated that it was normal that the parent bank should have overall responsibility for major strategic and policy decisions.

“It is a matter of public concern that the high dividend payout levels, including management fees paid to banks, do not seem to take into account the need to invest in banking infrastructure, staff development and training,” she said.

She further stated that it was a sound business strategy to invest in staff training, as Botswana has a small pool of bankers which is even smaller for those with world-class banking skills. She added that banks, and FNBB in particular as the market leader, should not rely on poaching staff from each other. Mohohlo stated that this could not be a viable and sustainable means of acquiring the skill-set and knowledge base necessary for the continued growth and development of the banking sector. 

“As the banking sector expands, it is logical to expect a diversity of banking products and services at a reasonable cost, in part through increased competition,” said Mohohlo.

She is of the view that although levels of efficiency show signs of improvement, particularly in turn-around times for loan application processing, several aspects of customer service need overhauling. 

She spoke of a recent report by KPMG entitled “Banking Industry Customer Satisfaction Report for Africa” which states that eight out of the 14 countries surveyed considered “friendliness of staff and their willingness to assist” to be the most important measure of customer care.  She believes that this suggests that customers need more than just access to finance; they need to be made welcome and afforded pleasant and helpful service. 

“The cost of banking infrastructure in a vast and sparsely populated country like Botswana can be high,” she said.

Mohohlo observed that it was a matter of serious concern that in a number of instances, the quality of service did not warrant the charges levied by banks for the associated services. She added that as a result, a perception has developed that charges are as high, to the point of being exorbitant, to compensate for banks’ internal inefficiencies.  

“The insidious effect of the high charges is that they impede progress towards financial inclusion; they also discourage saving and the all-important activity of effective financial intermediation in support of the wider economy,” she said.


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