In an effort to move forward, Botswana needs to utilise its developed financial services capability to fund investment opportunities and generate wealth through the export of financial service. Vice President Mokgweetsi Masisi said this at the Banking and Wealth Expo on Wednesday. He said to become competitive internationally; it would require concerted efforts by all stakeholders to address issues of access to finance and financial services, among others. “More importantly, we need to address issues of financial inclusion by concentrating on financial literacy and empowerment. The operational definition of financial exclusion is where a person does not have access to banking services or any other form of formal or informal financial services,” said the VP. According to Masisi, financial inclusion plays an important role in socio-economic development by impacting directly on people’s welfare through the reduction of transaction costs, enabling them to more efficiently manage risk, allocating capital for productive use, and supporting the accumulation of wealth over time. The inaugural Banking and Wealth Expo, held under the theme: “Bridging the Inclusion Gap through Financial Literacy” attracted over 40 exhibitors, including one international exhibitor, as well as resource persons from Botswana, South Africa and the United States of America.
Masisi said a survey on financial access and literacy which was sponsored by the Bankers Association of Botswana – organisers of the expo – has shown that that 50 percent of the adult population of Botswana uses banks, 18 percent exclusively utilise non-bank products such as retirement and insurance products, while 8 percent use informal financial products like Metshelo and Burial Societies. “This makes a total of 76 percent of the adult population with access to some form of formal services in the country. The remaining 24 percent do not use any financial products, and do not have access to financial services,” he said.Botswana’s policy objective, according to Masisi, is to reduce the level of financial exclusion from 24 percent to 12 percent by 2021. “It is instructive that evidence available shows a remarkably high degree of limited financial literacy or sophistication as measured by the extent of household domestic debt,” Masisi said, adding that to achieve this objective, policy development was and remains necessary for the creation of a conducive environment for financial institutions and to develop products and services that promote financial inclusion and stimulate economic activities.
In addition to policy development, Masisi noted that government has established a National Working Group chaired by the Ministry of Finance and Economic Development, whose membership includes Ministry of Basic Education; Ministry of Investment, Trade and Industry, Bank of Botswana, NBFIRA, the Bankers’ Association of Botswana, Botswana Savings Bank, Micro lenders, the Insurance sector, and the European Union, among others. This structure, Masisi explained, is intended to drive the financial inclusion agenda in the country. Stanbic Bank Botswana CEO Leina Gabaraane said financial literacy and inclusion are a long-term, never ending investment. “Our work is simply never done, and we need to continue to find new ways to help bring us closer towards our collective ambition of a financially sound, educated and savvy populace,” said Gabaraane. The expo was organised by Bankers Association of Botswana (BAB) together with Botswana Institute of Bankers (BIOB) and gave members of the public an opportunity to interact with a range of banks and many other financial service providers, including insurance companies.