Financial inclusion ticks up
Pauline Dikuelo | Monday September 20, 2021 06:00
According to the latest FinScope Consumer Survey report launched on Tuesday, there has been marked progress in the country, with around 242,947 more adults gaining access to financial services, and 242,884 adults categorised as excluded. Since its inception in 2002, the FinScope survey has been carried out in 28 African countries, with 14 of them in the SADC region, including Botswana.
The surveys are used by the market for product development, shaping policies, formulation of industry strategies and also for implementation of a joint national framework for fast-tracking financial inclusion in Botswana. Speaking during the launch, Finance and Economic Development minister, Peggy Serame applauded the strides made in financial inclusion noting that Botswana ranks fourth across SADC countries after South Africa, Mauritius and Swaziland. She said despite the progress, there is still more work that needs to be done to reduce the number of people excluded from the financial services sector. “The survey is a very critical and integral component in the financial inclusion agenda of the government.
“Financial inclusion brings many economic benefits to individuals as well as SMMEs through increased access to financial services leading to sustainable economic growth in general,” she said. Serame said efforts to update Botswana’s financial inclusion strategy are underway and the results of the survey will be useful. She said the survey can be used by markets for product development, shaping policies, formulation of industry policies and in the implementation of a joint framework for fast-tracking financial inclusion in Botswana.
According to the survey, consumers in Botswana generally use a combination of financial products and services to meet their financial needs. About 39.5% use a combination of formal and informal mechanisms to manage their financial needs, while 39,586 adults rely only on an informal mechanism to manage their financial needs as at 2020. About six percent growth has been recorded in the banking space while the uptake of other formal and non-bank products increased by 20%.
It has been evident that only 3.7 percent of adults rely exclusively on banking services while 2.6 percent of the adult population only relies on informal mechanisms such as village savings and loan groups to save or borrow money. In 2020, transactional products were the most used followed by savings products and there was a general decline in the utilisation of credit over the past years.
There was also a general drop in access and use of the portfolio of financial products.