Banks can bridge income disparities - PHK
Pauline Dikuelo | Friday August 22, 2014 13:33
Speaking during the annual Botswana Institute of Bankers (BIOB) gala dinner on Saturday, Kedikilwe stated that the National Development Plan 10 have underscored the need to facilitate the growth and efficiency of the financial sector.
This was because, he said, the sector is seen as increasingly critical in supporting the needs of the expanding more sophisticated economy.
“This entails fostering competition among financial institutions, enhancing access to financial services and promotion of financial innovation to support niche markets,” said the vice president.
Kedikilwe said promoting financial access for the under served should be a key focus for strategies to develop financial sector in order to bridge the socio-economic gap and promote sustainable development.
He added that access to financial services can be critical in helping the poor and remote area dwellers by providing affordable opportunities to fund productive investment in small businesses and facilitating small scale payments and savings.
“Banks in Botswana have played a major role in economic activity, with their real value added increasing nearly five fold over a twenty year period and as a result, doubling the sector’s share of the Gross Domestic Product (GDP),” he said.
He further urged local banks to be fully supportive of on-going initiatives to strengthen the effectiveness of credit bureaux in Botswana noting that cost effective access to banking services should be a key strategic objective for sustainable and broad-based financial sector development.
“Bank of Botswana has decided to declare a two year moratorium on a further increase in bank charges until the end of 2015.
This measure should not be seen as a punishment for banks but as a spur to focused discussion on the way forward,” Kedikilwe said.
On his part the Standard Chartered Bank chief executive officer Moathodi Lekaukau noted that banks employ excess of 5 000 people, excluding the indirect employment created by banking in other sectors.
He noted that through financing and operations, the banking sector supports value added in other sectors through project expansion financing and ultimately employment creation.
The agricultural, mining, manufacturing, electricity, water, construction, trade and transport sectors have benefited from the presence of commercial banks in the country.
“Banks are a significant contributor to the Government’s revenue. Last year the total tax paid by commercial banks amounted to more than P500 million,” Lekaukau said.
This year the BIOB was held under the theme ‘The role of banks and bridging the socio economic gap in promoting of sustainable development’.