Finance ministry drafts credit information bill

 

The Minister of Finance and Economic Development, Kenneth Matambo said the ministry is in the process of drafting the credit information bill to improve access to credit by small businesses.

Presenting the budget for the Ministry to legislators on Tuesday, Matambo said as part of implementing the national financial inclusion roadmap and strategy that runs from 2015 to 2021, the ministry is in the process of drafting the bill. “The bill will seek to improve both positive and negative financial information which will improve access to credit which is extended to small businesses and citizens,” said Matambo.

He said currently, Botswana Savings Bank (BSB), which focuses on developing low cost accessible and flexible savings products for the low-income earners currently excluded from the formal banking sector, is driving the financial inclusion mandate.  The bank is expected to open two more branches in Hukuntsi and Kanye this year. Matambo proposed the budget of P1. 5 billion for his ministry out of which the recurrent budget amounts to P 950 million (64.8%) while development budget amounts to P515 million (35.2%).The Botswana financial inclusion roadmap 2015 to 2021 objective is to help improve citizens’ welfare and support national objectives.

The roadmap is based on the diagnostic findings contained in making access possible.  According to the research findings by the Ministry of Finance and Economic Development published in 2015, formal access to finance stands at 68 percent. With most segments having broad access to financial services, 46 percent of adults use more than one product category including savings, credit, insurance and payments.  “However, access is still a challenge in certain segments and 24 percent are completely excluded, mainly in the lower income, rural and remote populations.” Among the key findings pointed as the barriers to financial inclusion in Botswana, are low income and lack of understanding of financial products.