Micro-lenders battle with compliance

The regulatory authority has received 214 micro-lending applications for licensing to date and as at January 7, 2014. It has issued 52 licences, highlighting the level of delinquency in the industry.

The massive non-compliance in the sector is due to the fear and or lack of understanding of regulations, a development that exposes customers to unscrupulous lenders. It is estimated that close to a thousand micro-lenders were operating in Botswana before the gazzetting of the regulations in March 2012. He explained that the authority is carrying out pre-licencing inspections on those who have applied for licencing. The inspection has revealed that most of the applicants are not compliant with the regulations. “Micro-lenders with identified deficiencies have been issued with management letters to rectify the deficiencies and only three have been shut down,” said Kwapa.