BotsPost creates splash with banking licence move
Lewanika Timothy | Monday September 2, 2024 06:00
Should it acquire the licence, BotswanaPost would shake up the industry, as it would be only the country’s second indigenous bank while carrying one of the most powerful and enduring brands in the country.
Postal services have suffered the brunt of technological disruptions, forcing their hand to look beyond their traditional business services. BotswanaPost for one has been having liquidity and cash flow challenges, as traditional revenue drivers have been surpassed by time, necessitating the move towards other plausible cash cows.
The company’s board chairperson, Nathan Kgabi, told journalists last week that BotsPost has launched an application for “a special banking licence” with the Bank of Botswana. This is a prelude to the introduction of a 'Post-Bank' that would operate as a specialised banking services provider.
“One of the areas we will be branching to as part of our new strategy is the Poso-Bank. We have applied for a special licence with the Bank of Botswana and the goal here is to look at community banking,” he said.
BotswanaPost has been eyeing a break into banking since at least 2012 when there was a proposed merger with the Botswana Savings Bank (BSB). The merger however could not close due to differences in regulations and governance structures. However, BotsPost has since renewed its interest to open up capital pockets of opportunity.
BotswanaPost CEO Cornelius Ramatlhakwane said that the company had been buffeted by a dwindling bottom line with the need to re-strategise its service offerings.
“Obviously as the Post Office we have challenges,” he said. “The one major challenge is the company’s balance sheet and liquidity. “Capitalisation of BotswanaPost gives it the strength to invest in the new strategic initiatives that are aligned with the national agenda, including financial inclusion and financial access.”
In postal banking, a post office offers basic financial services, much like a commercial bank but targets the country’s large unbanked population. With postal banking, the local post office also serves as a sort of bank branch providing bill payment processing, and even small loans.
Advocates argue that postal banking could make financial services more available to people who are currently unbanked, giving them a low-cost alternative.