The National Development Bank may become Botswana’s first wholly locally-owned private bank, according to a banking sector report complied by capital securities. Hitherto, commercial banks operating in the country were either wholly or substantially-owned by foreigners, a situation which made them susceptible to ignorance of the needs of the citizens of the country.
The report noted that while the banks were happy to do businesses and wealthier individuals, they did not make enough effort to broaden access to banking for small-scale businesses. SMSs, and low-income individuals. Besides, they applied lending conditions that were too strict.
There are currently seven commercial banks operating in Botswana, three of which are listed on the Botswana Stock Exchange. They are Barclays Bank, Standard Chartered Bank and First National Bank, while the rest, Stanbic Bank, Bank Gaborone, Bank of Barode and Capital Bank are yet to be listed.
However, Standard Chartered, last year, introduced a series of products tailor-made for small businesses while the recently established Capital Bank has a vision to cater primarily for SMEs and low-income individuals.
The report observes that some of Botswana’s state-owned financial or quasi-banking institutions are in the process of privatisation, while government is ceding its majority shareholding in the Botswana Building Society. But it is still unclear what ownership character these financial institutions will eventually assume. According to the report, there is some potential for fully-fledged local ownership through privatisation and restructuring, and they will have to go through the process of obtaining a banking licence.
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