Cabinet weighs in on household debt crisis

BusinessWeek is informed that Cabinet has been pressuring the Bank of Botswana (BoB) for recommendations on tackling the household debt crisis, which various commentators say has reached critical levels.While the Bank says its statutory mandate of ensuring banking system stability remains unthreatened by rising household arrears, the Executive attention is understood to have thawed attitudes at the BoB, which this week announced it was worried about “consumer welfare” in the debt crisis.

Highly-placed insiders told BusinessWeek that members of Cabinet had asked the central bank to address rising household indebtedness from a consumer welfare point of view and make recommendations. By March 2014, households owed commercial banks P23.4 billion with arrears of P1.2 billion by the end of December 2013 and billions more owed to hire purchase services, microlenders, pawnshops, salary advances and informal lenders.