The Ministry of Finance and Development Planning has no policy dictating to the banks where they should open their branches, but it is up to financial institutions to set up where it makes commercial sense, parliament has been told.
Assistant Minister of Finance and Development Planning Vincent Seretse said on Monday however that government will afford the sector an enabling environment.
“However it is the decision of the banks to determine whether they want commercial presence in the rural areas or provide service through other means taking cognizance of the infrastructure provided,” Seretse said, adding that the treasury has taken positive steps including provision of physical infrastructure such as roads, water, electricity and telecommunications to most rural areas in Botswana.
Shoshong MP, Phillip Makgalemele, had asked the minister to brief parliament on the progress made in attracting banks to the rural areas since the house adopted a motion calling for such a development.
Seretse said government continues to amend legislation relating to the financial and banking sector to ensure an enabling environment and that they continue to come up with new financial sector policies including Credit Reporting System and Financial Inclusion.
To their credit, banks have extended Financial Inclusion to the rural areas in a number of innovative ways. Some of these initiatives are mini-branches, mobile branches, ATM’s, Internet and cellphone banking, point of sale terminals and smartcard technologies.
“These and other alternative technology-based means of delivering bank services are dramatically changing the financial landscape and reducing the relative costs compared to the “brick and mortar” models of providing services in Botswana,” Seretse said.
Some of these technologies allow for a wide range of operations such as making deposits, withdrawals, payment instructions, transfer of funds and other conventional banking services.
Seretse cited the National Development Bank which has launched mobile banking for Northern and Southern side of Botswana.
“The recent merger between Botswana Savings Bank and Botswana Post will ensure commercial presence in the rural areas since our post offices are accessible nation-wide,” he said, identifying “Botswana Post has postal agencies in villages like Thabala, Moiyabana, Kalamare, Shoshong, Mogorosi and Mmualefhe and many others.”
“It is my view that strategies made directly by the financial sector to improve accessibility of products top the rural population will ensure that a majority of the population is included in the financial and banking sector by the end of NDP 10,” Seretse concluded.