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Gaolathe urges banks to support local development

Staff Writer
FRANCISTOWN: The Minister of Finance and Development Planning, Baledzi Gaolathe, has urged banks to support local development.

The minister said this at the official opening of the Francistown branch of Bank Gaborone on Tuesday.

The latest Bank Gaborone branch, which has been operating since April 24, is the third in the country after two in Gaborone.

Gaolathe said in recent years, financial institutions have tended to focus their efforts on investments with the highest rate of return.

"As a result, in some areas, investment funds have gone out of the country to where high profit was expected," he said.

In doing so, the minister said, the banks have paid less attention to the needs of communities in which they are based.

"Commercial banks ought to be re-acquainted with their responsibilities to local communities," Gaolathe said.

By helping businesses and households take appropriate risks, banks play an important part in a productive economy and financially healthy society.

"Whether one is taking the risk of starting a new business or borrowing for buying a car, the role of banks is to support entrepreneurship, which is a substantial ingredient of a sustainable economic growth," he said.

Banks must only support appropriate risk by lending only to those who can afford to repay. "It's very clear that as an industry, the international banking sector has misjudged this subject over the last years,

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helping cause the fuelled economy to be misaligned with the real economy," Gaolathe said.

He urged the financial services industry to be transparent about its contribution to these problems and to accept its share of responsibility.

"Botswana's competitive banking system is considered one of Africa's most advanced," he said. "Generally, adhering to global standards relating to transparency of financial policies and banking supervision, the financial sector in Botswana provides ample access to credit entrepreneurs."

The Managing Director of Bank Gaborone, Andre Barnard, said the Francistown branch will serve as a hub for the northern region and make the bank more accessible to more clients.

"Although the mining industry as a whole has experienced changes, we believe that there are other industries in this region that can benefit from our products and services," Barnard said. The Francistown branch has been refurbished at a significant investment of over P1.5 million, he revealed.

"It offers convenient banking to our clients in a spacious 97.75 m2 banking hall with state-of-the-art equipment," he said, adding that the branch employs 11 people.

Barnard said Bank Gaborone's network expansion initiative are closely linked to the bank's objective of employment creation. "To-date the bank employs 158 people 95 percent of whom are Batswana," he said.



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