Barclays unveils good news for metshelo

KEIKANTSE LESEMELA
Correspondent | Monday September 10, 2012 00:00

 

Metshelo are a traditional and informal savings system in which members contribute funds on a monthly basis and share the returns in cash or kind on an agreed date.Being unofficial, however, many such cooperatives have fallen through the cracks in commercial bank products, often being forced to open corporate accounts and thus incur commercial charges incongruent with  motshelo saving objective.Those that opt to save in one member's bank account, also find that the charges for the numerous deposits and withdrawals associated with the motshelo's activities draw high charges or the suspicion of banking officials.

Last week, Barclays announced that it had come to the rescue, establishing a product it described as a 'safe place,' for metshelo. Explaining the product, Barclays Motshelo Product Manager, Shepherd Kgafela, said the new product, known as the Group Savers Account, is an attempt by the bank to bridge a gap identified in the market.'We realised that people are trying to make life easier for themselves through motshelo but the traditional way of saving is not safe because they normally keep their money at home which is risky,' he said.'Also keeping the money at home could lead to any group member being tempted to use it.'

Kgafela revealed that Barclays consulted with the Bank of Botswana (BoB) and the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) in coming up with its motshelo product.Through this consultation, the bank has been able to develop a tailor-made product responding to the cries of motshelo members.The group savers account only requires P500 opening deposit, a minimum of three members, Omang or passports of two signatories, proof of residence and names as well as a confirmation by members of the club. In return, the members receive free P2,000 accidental cover for 10 members, chequebook, monthly statements, SMS alert.Most importantly through, Barclays' officials say the new product offers an attractive interest rate, enabling motshelo members to realise real value on their activities.

Changes in signatories and other details are possible on the anniversary dates of the account. A recent World Bank report found that 14 percent of adults in Botswana use informal or community-based methods for savings, providing the first estimate of metshelo available.According to the World Bank's figures, the level of community-based savings in Botswana ranks among the top 10 in Africa and is equal to that estimated in South Africa. Nigeria and Cameroon lead the continent in community-based savings.