NBFIRA on financial literacy campaign
Boitshepo Majube | Wednesday March 19, 2014 12:29
Through various financial literacy education programmes delivered through media and public workshops, NBFIRA this week embarked on a seven-day financial literacy education week in Gaborone and in Francistown.
The regulator states that the Financial Literacy Week is an initiative central to helping consumers make better decisions about management of their money conversely avoiding over indebtedness.
“Botswana, as part of the global village is not immune to the above situation as the larger proportion of the population is not knowledgeable about the financial products and services and the existing financial services law,” NBFIRA Communications and Public Affairs Manager Tapologo Kwapa said.
The mandate of the regulatory authority is to supervise and regulate non-bank financial institutions for the purpose of contributing towards financial stability.
Kwapa says a financially literate community can in addition identify financial scams and swindlers as these thrive in communities, which are poor and financially illiterate.
He said the Authority believes that the current situation calls for appropriate interventions aimed at improving financial literacy, which will in turn improve consumer knowledge of the financial markets and offer protection to the consumers.
“We strongly believe that Consumer education has a dual role to play; to educate those using financial products and services so that they could make informed decisions, and to promote the use of financial services to those who are financially excluded,” he said.
Kwapa stated that they view consumer education on financial literacy as a shared responsibility among many stakeholders.
As outlined in section 8 of the NBFIRA ACT, the principal objective of NBFIRA is to regulate and supervise the non-bank financial institutions so as to foster the: Safety and soundness of non-bank financial institutions, highest standard of conduct of business by non-bank financial institutions, fairness, efficiency and orderliness of the non-bank financial sector, stability of the financial system and reduction and deterrence of financial crime.
NBFIRA says the Financial Literacy Campaign is a result of endless complaints by non-bank financial consumers who are unable to make informed choices and decisions due to complexity of both financial products and services.
“We have through our different regulatory departments found out that many Batswana either invest in companies that are neither registered nor licensed by NBFIRA and end up losing their hard earned money,” Kwapa said.
He stated that their target audience is Youth, workers, and community leaders, Unions, NGOs etc, which they will continue to engage throughout their Consumer Financial Literacy Campaign over a period of three years.
“We have also made an observation that there has been a shift from investing in non-formal financial assets such as property and cattle to investing in complex financial products in a quest to improve long term returns and diversity.” he said, adding that they have deliberatively included their Retirement and Investment Institutions department to educate consumers, mostly pensioners.
Kwapa said there have been incidents of reckless borrowing by consumers from Micro Lenders regardless of high interests.
“We have realised that consumers don’t sign contracts with micro lenders and also do not understand contractual terms before signing for an insurance policy,” he said.