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Banking Industry Botswana

The Banking Industry in Botswana 2021

Charles Chinya | Botswana | 13 October 2021

The Banking Industry in Botswana 2020

Louise Mitchell | Botswana | 17 January 2020

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Report Coverage

This report on the banking sector in Botswana covers financial institutions including banks, other credit granting, lease financing, and loyalty and reward programmes, as well as central banking. It includes information on the state and size of the sector, regulation, developments and corporate actions. There are profiles of 23 companies including ABSA Botswana, African Banking Corporation of Botswana (trading as Banc ABC), First National Bank of Botswana, Stanbic and Standard Chartered, government-owned developmental finance institutions such as Botswana Savings Bank, National Development Bank and Botswana Development Corporation and savings and credit cooperative societies such as Maitlamo, Motswedi and Thuto.

Introduction

Botswana’s Banking industry is an increasingly important sector in terms of the supporting role it plays in the development of other sectors of the economy. This report covers financial institutions including banks, other credit granting, lease financing, and loyalty and reward programmes, as well as central banking. Data from the central bank, the Bank of Botswana (BOB), indicates that total assets of commercial banks were P104.3bn (pula) (US$9.8bn) in 2020, growing 9% from P98.7bn (US$9.2bn) in 2019. The growth in assets was mainly driven by gross loans and advances. There are currently eight licensed commercial banks, all majority foreign-owned. Five large banks – ABSA Botswana, African Banking Corporation of Botswana (trading as Banc ABC), First National Bank of Botswana (FNBB), Stanbic and Standard Chartered – dominate the sector and accounted for 84.7% of total assets, 85.3% of total deposits and 87.5% of total loans and advances.

Strengths

• Botswana banking industry is stable and well capitalised.
• Expansion of products targeted at SMEs by commercial banks and micro-lenders.
• Good road infrastructure acts as catalyst for vehicles sales growth and motor finance.
• Government support for SMEs to get access to finance.
• Growing microlending sector can improve financial inclusion.
• Robust regulatory framework has been implemented.
• Strong presence of wholly-owned banks which have access to investment, skills, and experience of holding companies.

Weaknesses

•  Two commercial banks surrendered their licences.
• Challenges for SMEs to access finance.
• Closure of branches by some banks has resulted in job losses.
• No new banks entered the market since 2013.
• Poverty and unemployment in majority section of the population.
• The banking sector is not a priority development in the National Development Plan 11.
• The unbanked rural population has limited access to finance.

Opportunities

•  Short term financing opportunities for the banking sector due to government’s pandemic financial assistance recovery programmes.
• Rollout of mobile money services in rural areas.
• The growing used car market offers opportunities for lease financers.
• The number of unbanked, particularly in rural areas.

Threats

• Banks are the custodians of clients’ data and they become targets of cybercrime.
• Increase in non-performing loans as result of low economic activity.
• Risk is likely to increase due to exposure to unsecured household credit.

Outlook

Challenges brought by the coronavirus pandemic present elevated risks in the Botswana banking sector, although it has continued to be resilient, and banks reported good business performance across the sector. The rollout of an effective vaccination programme is critical to resuscitation of Botswana’s economy. The banking sector anticipates that in the medium to long term, employment and consumer spending will remain under pressure while business confidence and investment will slowly and steadily rebound upwards. Vulnerabilities and elevated risks relating to the structure and performance of the Botswana economy, notably the dependence on the mining for export earnings exposes the country to external shocks. Despite these vulnerabilities, industry analysts see potential growth in the low income and unbanked market and new opportunities resulting from technological change. The Economic Recovery and Transformation Plan offers opportunities for the banking sector to lend in priority development sectors in construction agriculture, education, and tourism.

Read More..
The Banking Industry in Botswana
The Banking Industry in Botswana 2021

Full Report

R 6 500.00(ZAR) estimated $352.51 (USD)*

Industry Landscape

R 4 550.00(ZAR) estimated $ 246.76 (USD)*

Historical Reports

The Banking Industry in Botswana 2020-01-17

R 1 900.00(ZAR) estimated $103.04 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 3
3.1. Industry Value Chain 7
3.2. Geographic Position 8
4. SIZE OF THE INDUSTRY 8
5. STATE OF THE INDUSTRY 12
5.1. Local 12
5.1.1. Corporate Actions 16
5.1.2. Regulations 16
5.1.3. Enterprise Development and Social Economic Development 18
5.2. Continental 19
5.3. International 24
6. INFLUENCING FACTORS 28
6.1. Coronavirus 28
6.2. Economic Environment 29
6.3. Financial Inclusion 30
6.4. Rising Input Costs 31
6.5. Technology, Research and Development (R&D) and Innovation 32
6.6. Government Incentives and Support 33
6.7. Cybercrime 33
6.8. Environmental Concerns 34
6.9. Labour 34
7. COMPETITION 36
7.1. Barriers to Entry 36
8. SWOT ANALYSIS 2
9. OUTLOOK 2
10. INDUSTRY ASSOCIATIONS 3
11. REFERENCES 3
11.1. Publications 3
11.2. Websites 40
APPENDIX 1 41
Summary of Notable players 41
COMPANY PROFILES 44
ABSA BANK BOTSWANA LTD 44
AFRICAN BANKING CORPORATION OF BOTSWANA LTD 48
AFRITEC (PTY) LTD 51
BANK GABORONE LTD 53
BANK OF BARODA (BOTSWANA) LTD 56
BANK OF BOTSWANA 58
BANK SBI BOTSWANA LTD 61
BBS LTD 63
BOTSWANA DEVELOPMENT CORPORATION LTD 66
BOTSWANA HOUSING CORPORATION 71
BOTSWANA SAVINGS BANK 74
CITIZEN ENTREPRENEURIAL DEVELOPMENT AGENCY 77
FIRST CAPITAL BANK BOTSWANA LTD 80
FIRST NATIONAL BANK OF BOTSWANA LTD 83
FIRSTCRED LTD 88
LETSHEGO FINANCIAL SERVICES (PTY) LTD 91
MAITLAMO SAVINGS AND CREDIT COOPERATIVE SOCIETY LTD 94
MONEY QUEST INVESTMENT (PTY) LTD 96
MOTSWEDI SAVINGS AND CREDIT CO-OPERATIVE SOCIETY 99
NATIONAL DEVELOPMENT BANK 101
STANBIC BANK BOTSWANA LTD 104
STANDARD CHARTERED BANK BOTSWANA LTD 108
THUTO SACCOS LTD 112

Report Coverage

This report on the banking industry in Botswana includes information on the state and size of the industry and the factors that influence it including economic conditions, regulation and corporate actions. There are comprehensive profiles of 19 companies in the sector including Standard Chartered, which launched Botswana’s first digital retail bank in 2019. Other profiles include BBS, which listed on the over the counter Serala exchange in 2018, Letshego, the leading microlender and development institutions such as Botswana Development Corporation and the National Development Bank.

Introduction

This report on Botswana’s banking industry covers financial institutions which include banks, other credit granting, lease financing, and loyalty and reward programmes, as well as central banking. Data from Bank of Botswana, the central bank, shows that total assets of all licensed deposit-taking banks grew by 9.4% from (pula) P83.5bn (approximately US$8.1bn) in 2017 to P91.3bn (approximately US$9bn) in 2018. The country has ten commercial banks that are all foreign-owned. The five largest commercial banks by assets, African Banking Corporation of Botswana (trading as BancABC), Barclays Bank of Botswana, First National Bank of Botswana (FNBB), Stanbic and Standard Chartered, continued to dominate the sector in 2018 and accounted for 88.7% of total assets, 87.9% of total deposits and 87.8% of total loans and advances. South African-owned banks are the market leaders - FNBB, owned by FirstRand, was the market leader in 2018 holding 27.2% of the aggregate assets of all the banks, followed by Barclays with 18.8%.

Strengths

• A robust banking regulatory framework has been implemented.
• Botswana banks are well capitalised.
• Efficiency of banks is driving down operating costs.
• Expansion of products for SMEs by commercial banks and microlenders.
• First National Bank Botswana’s strength in technological innovation is expanding access to financial services and products.
• Good road infrastructure supports growth in vehicle sales.
• Government support for SMEs to get access to finance.
• Growing microlending sector can improve financial inclusion.
• Major international banks have a strong presence and bring with them skills and experience.
• The business environment is less challenging than neighbouring countries.

Weaknesses

• Constrained access to finance for SMEs.
• High unemployment rate and poverty.
• Job losses through retrenchments and closure of branches by some banks.
• Limited national backbone bandwidth precludes access for certain parts of the country to mobile money.
• No new commercial banks entered since 2012.
• Slowing economic growth affects consumers’ disposable income.
• The banking sector is not a priority development area in the national development plan.
• The largely unbanked rural population has limited or no access to financial services.

Opportunities

• Partnerships with technology companies present new distribution channels.
• The growing used car market presents expansion opportunities for lease financiers.
• The roll-out of mobile money services, particularly in remote areas and which are not served by traditional banks.

Threats

• Banks host databases with sensitive client data and as such they are targets of cybercrime.
• Challenges in getting electricity and credit is a threat to a business environment conducive to growth.
• Increasing number of non-performing loans resulting from deteriorating macroeconomic conditions.
• Risk is likely to increase due to exposure to unsecured household credit.

Outlook

Macroeconomic conditions will be a determining factor in the pace of industry growth as low economic growth will continue to affect disposable income. Commentators see three areas of potential growth: the low income and unbanked market; new opportunities resulting from technological change; and under-served business sectors. Banks see growth in lending opportunities beginning to emerge in the government’s priority development sectors, namely tourism, construction and agriculture. Innovation will be accompanied by investment into ever more sophisticated technology systems and people with the required skills. The trend of insurance, banking and technology becoming increasingly more integrated, is expected to continue as it is a global trend.

Read More..
The Banking Industry in Botswana
The Banking Industry in Botswana 2020

Full Report

R 1 900.00(ZAR) estimated $103.04 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.13 (USD)*

Historical Reports

The Banking Industry in Botswana 2021-10-13

R 6 500.00(ZAR) estimated $352.51 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 4
2. COUNTRY INFORMATION 4
3. DESCRIPTION OF THE INDUSTRY 5
3.1. Industry Value Chain 11
3.2. Geographic Position 12
4. SIZE OF THE INDUSTRY 13
5. STATE OF THE INDUSTRY 17
5.1. Local 17
5.1.1. Corporate Actions 21
5.1.2. Regulations 21
5.1.3. Enterprise Development and Social Economic Development 23
5.2. Continental 24
5.3. International 30
6. INFLUENCING FACTORS 33
6.1. Economic Environment 33
6.2. Government Initiatives 33
6.3. Financial Inclusion 34
6.4. HIV/AIDS 35
6.5. Operating Costs 35
6.6. Information Technology (IT), Research & Development and Innovation 36
6.7. Labour 37
6.8. Environmental, Social and Governance (ESG) Factors 38
6.9. Cybercrime 39
7. COMPETITION 40
7.1. Barriers to Entry 40
8. SWOT ANALYSIS 41
9. OUTLOOK 42
10. INDUSTRY ASSOCIATIONS 42
11. REFERENCES 43
11.1. Publications 43
11.2. Websites 43
APPENDIX 1 45
Summary of Notable players 45
COMPANY PROFILES 48
AFRICAN BANKING CORPORATION OF BOTSWANA LTD 48
BANK GABORONE LTD 52
BANK OF BARODA (BOTSWANA) LTD 54
BANK OF BOTSWANA 56
BANK SBI BOTSWANA LTD 58
BARCLAYS BANK OF BOTSWANA LTD 60
BBS LTD 64
BOTSWANA DEVELOPMENT CORPORATION LTD 67
BOTSWANA HOUSING CORPORATION 72
BOTSWANA SAVINGS BANK 75
CITIZEN ENTREPRENEURIAL DEVELOPMENT AGENCY 78
FIRST CAPITAL BANK LTD 81
FIRST NATIONAL BANK OF BOTSWANA LTD 84
GETBUCKS LTD 89
LETSHEGO FINANCIAL SERVICES (PTY) LTD 91
MAITLAMO SAVINGS AND CREDIT COOPERATIVE SOCIETY LTD 93
MOTSWEDI SAVINGS AND CREDIT CO-OPERATIVE SOCIETY 95
NATIONAL DEVELOPMENT BANK 97
STANBIC BANK BOTSWANA LTD 100
STANDARD CHARTERED BANK BOTSWANA LTD 104