Monday, October 26, 2020

NBFIRA grows in leaps and bounds

BY KABELO SEITSHIRO

During the past 10 years of the authority’s existence, NBFI has grown noticeably by assets valued at P123 billion in 2017. The growth accounted for 68 percent of the national Gross Domestic Product with 57 percent of total assets in the local financial system.

During the past 10 years of the Authority’s existence, the NBFI sector has grown noticeably. In 2017 its assets were valued at P123 billion, accounting for 68 percent of the nation’s Gross Domestic Product, and made up 57 percent of total assets in the local financial system. That same year, the sector’s gross income was P16, 347 billion, contributing 9 percent to GDP.

The NBFI sector has evolved in depth and sophistication and currently comprises of a wide array of new market players, products and services. Its centrality to the financial stability and socio-economic fabric of the nation is conspicuous.” said Sriram Gade, Deputy Chief Executive Officer – Regulatory of NBFIRA standing in for Ramasedi.

“It is worth noting that this growth and dynamism in the NBFI sector occurred against a backdrop of challenging macro-economic conditions both globally and locally,” said Gade.

He also expressed satisfaction regarding the Capital Markets industry which grew by an additional 52 licensed players as well as the advent of an additional seven categories of operation within the industry.

He said these include Asset Managers, International Financial Services Centre (IFSC) accredited entities and management companies and trustees for Collective Investment Undertakings (CIU) representing increased sophistication and diversity of the industry.

“The last decade has not been without its fair share of challenges for the NBFI sector as well as the Authority,” he said.

He remembers that 2015 saw the Botswana Stock Exchange (BSE) achieve record annual turnover of P3 billion. Volume of shares traded P803.1 million since its inception.

Gade is of the view that key regulatory developments during this period had a ‘catalytic effect’ on the growth and dynamism of the sector holistically.

He added most notably was the implementation of prudential rules for insurance, retirement funds and capital markets in 2012, as well as the promulgation and commencement of the micro-lending regulations which also took place the same year.

“The authority plays a supervisory role in ensuring the NBFI sector’s compliance to local laws and international best practices on the globally imperative issue of Anti Money Laundering Countering the Financing of Terrorism and Proliferation,” he said.

During the decade, said Grade, the insurance industry’s gross written premiums grew by 138 percent since 2008 recorded as P5 billion in 2017.

He added this growth was primarily attributable an increase in the number and range of products offered, as well as the rise in the public’s demand for insurance cover in the new market entrants namely reinsurers, medical aid funds and insurers.

He said distribution channels were expanded to include mobile phone and post office services and the advent of two new industry associations for short-term insurance and insurance brokers were a welcome development.

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