Bank arrears improve
Mbongeni Mguni | Thursday September 10, 2026 14:45
Bank of Botswana figures released recently indicate that from the record high in January, the arrears owed to commercial banks slowly declined, helped in part by lower credit output by the banks.
Outstanding loans by commercial banks were measured at P89.4 billion in January, peaking at P90.4 billion in May, before declining to P89.2 billion in June. The arrears position peaked in January before declining to a low for the six-month period of P6.57 billion in March, then climbing to P6.89 billion in June. Central bank numbers indicate that the majority of arrears in June were classified as 'specific provisions', meaning those loans that are more than 180 days old and are potentially more difficult to recover. As at June, specific provision arrears amounted to P1.83 billion or 27% of the total P6.89 billion position.
Commercial banks’ provisions for bad and doubtful debts amounted to P354.8 million in the first six months of the year, compared to P383.8 million over the same period last year, suggesting an improvement. Local banks have slowed down their credit output and doubled down on various recovery methods, due to the tighter liquidity conditions in the market and the general downturn in the economy.
Liquidity conditions have improved in the new financial year, helped by higher diamond exports and a bumper windfall dividend paid by the central bank to government.