The evolution of the financial sector in Botswana has been guided by policy formulation, advancement in financial technology, evolving user needs in the economy as well as adoption of international standards and best practice.
With respect to legislation, there have been several enactments which resulted in regulatory authorities such as the Non Banking Regulatory Authority (NBFIRA), and the Financial Intelligence Authority (FIA).
NBFIRA has a regulatory oversight of non banking institutions such insurance companies, asset management companies and micro lenders while FIA’s main role is to combat financial offences.
Despite the changes in legislation, Botswana generally lags behind high income countries and its Upper Middle Income Countries (UMIC) peers on access to both financial institutions and financial markets.
The Bank of Botswana research department in early 2019 revealed only 64 percent of the population in rural areas in Botswana has access to formal financial products and services compared to 90 percent and 81 percent in Mauritius and South Africa respectively.
This means for many Botswana citizens, precisely those in rural communities, access to financial services has remained a dream.
This exclusion has worked against all efforts to fight poverty and also to bring such basic services like health and information closer to the people.
Given the need to close the gap, Botswana Savings Bank (BSB) says its newly strategic partnership with Old Mutual Botswana is expected to take lead in financial inclusion by delivering sound financial education to consumers.
BSB Managing Director – Nixon Marumoloa says financial education is becoming increasingly important because of today’s dynamic, fast developing, globally connected and complex financial markets. He is of the view that the financial needs of individuals are becoming more and more individualized.
“Without sufficient financial knowledge and or financial education, it becomes increasingly more widespread for individuals to enter into inappropriate or ill-advised financial transactions,” says Marumoloa.
Marumoloa believes that appropriate education therefore, in the turf of money matter, becomes more and more important. He added that BSB has always sought to stimulate conversation and provide a platform to raise awareness on financial education matters Marumoloa stated that financial education remains a priority area adding that it is consistent with the bank’s core mandate of inculcating a culture of saving amongst Batswana.
Through the partnership, the two financial institutions maintain that they will be able to contribute to the importance of financial education in Botswana by offering their clients free financial education.
BSB and Old Mutual are expected to work together in rolling out the programme over the next 12 months which is structured such that individuals are taught a set of skills that allows an individual to make informed and effective decisions with all their financial matters.
“This is an important tool for supporting economic development and improvement in living standards,” said Marumoloa.
Group CEO old Mutual Botswana Gerald Randall says the absence of financial literacy can lead to poor financial decisions and poor planning.