Top leading bank, First National Bank Botswana, is concerned about the increasing youth joblessness, describing it as the biggest obstacle to the country’s economic prosperity. The bank has now decided to make the issue a priority, suggests FNBB Foundation report.
The bank says it revised the Foundation’s strategy in 2018 in response to the rising unemployment, which has affected young graduates the most, as the bank embarks on various interventions that will lessen job scarcity. Since 2001, the FNBB Foundation has been the primary driver of the bank’s corporate responsibility, dispensing over P50 million in the past 19 years.
“Rising youth unemployment is a major challenge in Botswana caused by a lack of relevant skills and low levels of education and work experience. Combined, these factors prevent youth from participating in the country’s labour market,” said the report published on Friday.
The bank said not only does unemployment negatively impact national productivity, it also leads to more of the country’s youth struggling with poverty, poor health and depression linked to economic and social exclusion.
“In the long term, prolonged unemployment can have a devastating impact on their lifetime prospects and result in potentially lower earnings throughout life. This is particularly concerning considering Botswana’s young population.”
Steven Bogatsu, FNBB’s chief executive officer, disclosed that discussions around the jobless youth prompted the bank to challenge the way it does business.
“We began looking for opportunities along our supply chain to reduce youth unemployment, promote entrepreneurship and encourage the development of small and medium sized businesses. This includes, for example, redirecting a portion of our procurement spend to support enterprises owned by young people living in Botswana,” Bogatsu said in the report.
Though the process is not yet formalised, he said the bank was are reviewing its policies and procedures to find ways to align the young with opportunities this year.
In addition, the bank added that its commercial segment continues to intensify its efforts to grow SMMEs through a targeted value proposition and by forming leading partnerships with development entities such as the Ministry of Youth Empowerment, Sport and Culture Development.
“We want to ensure these SMMEs have access to sustainable capital and possess adequate business skills and resources at every stage of their business life cycle,” the report said.
FNB’s concern and intervention over the widening crisis of youth unemployment stems from the segment remaining one of its key growth areas. The bank, which has the largest customer base in the country, benefits from first mover advantage which involves capturing young people as their first alternative bank.
In late 2019, FNBB announced that it will launch two youth transactional accounts – FNBy and FNBy Next. The two accounts come with low monthly charges, and other benefits which include free unlimited swipes, free ATM deposits and two free ATM withdrawals. The accounts will be rolled out in October.
FNBY and FNBy Next will only be offered to customers aged below 24 years, and the banks says this is part of its efforts to introduce the younger population to banking. FNBB already controls a large share of the youthful market thanks in part to its lucrative service contract with the government, in which the bank facilitates payment of student allowances.