Study to gauge financial inclusion on cards
Pauline Dikuelo | Tuesday February 10, 2015 12:53
According to Minister Kenneth Matambo, improving financial inclusion is key to achieving inclusive growth through provision of basic financial services to the people. “The financial sector has intensified its efforts to promote financial inclusion, broadly defined as the delivery of financial services at affordable costs to disadvantaged and low-income segments of the society.
“During the year 2015/2016, a ‘Making Access to Financial Services Possible’ diagnostic analysis will be carried out in Botswana, with the view to develop a comprehensive financial inclusion road map, which should lead to a more accessible, inclusive and robust financial system,” said Matambo last week when presenting the 2015/16 Budget Speech.
He further noted that achieving inclusive growth, as a policy objective will depend on among others, the extent to which the financial system provides basic financial services to the people.
“Mobile financial services are one of those initiatives that are being used to promote financial inclusion. It includes mobile money transfer and mobile banking such as e-wallet and others, which are easily accessible and convenient medium for the delivery of financial services,” he added.
The use of mobile banking has been identified as a major instrument in reducing the number of the unbanked, which was estimated at almost 50 percent by a 2009 Finscope study.
According to the latest Bank of Botswana supervision report, the central bank has approved the use of mobile banking applications from two commercial banks. These services will enable the banked and unbanked mobile phone subscribers to carry out bill payments, funds transfers, mobile recharges or airtime top-ups and micro-finance loan repayments using mobile handsets.
The banking sector has also introduced a prepaid VISA banking card that will enable Insurance policy holder’s beneficiaries to access their claim payouts using the banks VISA enabled ATM’s. From the latest Bank of Botswana annual report, data from selected countries show that Botswana ranks virtually low in all measures of financial inclusion. Notably the extent of saving and borrowing relative to per capita is much lower.
According to the World Bank, only six percent of Batswana, aged 15 years and above, had a loan with a financial institution as at 2011, while 16 percent owned a debit card.
As at 2011, the World Bank says that only 30 percent of the Botswana population has ever had an account with a formal banking institution while 16 percent had a savings account with a formal financial institution. The World Bank also says that shows that there are disparities in the use of financial services between developed and developing economies.
It is estimated that more than 2.5 billion adults in developing economies have no formal banking account.
Gap in bank account usage between demographic groups is also substantial in developing economies. About 46 percent of men compared to 37 percent of women have bank accounts.