We Need A Diversified Banking Sector

Monitor Editor | Monday October 24, 2016 15:37

We wish to welcome the new Governor as he starts  his  chapter. We hope he will have a lasting legacy like his precessors. Pelaelo takes over at a time when Botswana is grappling with unemployment.

Surely, BoB’s duty in the current situation is more than just  monitoring inflation, but most importantly exploring immediate and long-term solutions that it can offer as  the banking regulator to  diversify the banking sector with a view to  creating  diverse players in the sector for job creation and attraction of foreign direct investment in this highly untapped sector  which has largely focused on commercial banks.

Pelaelo and his team would have to fast track legislations with stakeholders that  would  cater for different levels of financial institution licensing, from merchant and commercial banks to “KYC-lite” deposit-taking micro-finance institutions to microcredit-only institutions.

The opportunities that would be derived from the urgent formulations of  such instruments cannot be overemphasised, especially in this era of unemployment when job creation  should be the utmost priority of everyone, in this case, the BoB.

Such opportunities  would definitely allow even entities such as Letshego, as this tiered licensing allows a Tier 3 or 4 entity like Letshego to focus its model on low and middle-income earners without the heavy capital and other prudential requirements more appropriate to full service commercial banks.

Letshego as an immediate example has had to fish for opportunities in neighbouring Namibia, where they have been awarded a banking licence, which they are celebrating there towards the end of this year.

These are opportunities that would have otherwise been enjoyed by our own economy, and benefitting our people as hundreds of jobs would have been directly created by  this opportunity. Indeed the speedy enactment of these favourable instruments   could result in  several locals  also taking advantage of the  new opportunities, to start their journey towards becoming  citizen millionaires.