International partners help NBFIRA to plug skills gap

KEIKANTSE LESEMELA
Correspondent | Thursday July 18, 2013 00:00

 

At the launch of the NBFIRA logo this week, the minister said that the organisation faces challenges in human resources due to the acute shortage of local expertise in the regulatory area.That is why it is relying on the international labour market to get experienced staff. Matambo said the authority has developed close working relationships with other regulatory organisations in the region as well as international bodies like the International Association of Insurance Supervisors, the International Organisation of Pension Supervisors and the African Development Bank (AfDB) to close its manpower gaps. 'These organisations have also assisted in developing the human capital for NBFIRA by training staff in best practices in the regulatory environment and helping close the skills gap in key areas,' said Matambo.

In 2011, AfDB carried out a project to support NBFIRA in implementing a Risk Based Regulatory Model (RBRM) in line with international best practices. This was meant to unlock independent funding from the private sector as the law indicates that the authority should be financed through fees levied on the regulated industries. The experts assisted in designing the model, providing the necessary operational procedures, training and IT systems.From its inception in 2008, NBFIRA has been funded through an annual government subvention, which has been inadequate for its operational needs. NBFIRA was established after the government decided to establish a single independent authority to regulate the activities of non-bank financial institutions in the country. Historically, a department in the Ministry of Finance and Bank of Botswana performed regulatory functions now undertaken by NBFIRA.

The mandate of NBFIRA is to regulate and supervise non-bank financial institutions so as to foster the safety and financial soundness of the sector. It is charged with promoting the highest standards of business conduct, fairness, efficiency and orderliness within the non-bank financial sector.NBFIRA regulates a diverse spectrum of non-bank financial institutions and operations. These include general and long-term insurance companies, pension and provident funds, capital markets operations, trustees, brokers, dealers and asset managers.Matambo commended the authority for significantly implementing the regulatory framework. He said the promulgation of micro-lending regulations in 2012 was a major step towards establishing financial soundness in this sector. 'In its quest for continuous improvement in the legislative framework that guides NBFIRA's functions and procedures, my ministry jointly with NBFIRA, is conducting a thorough review of all applicable legislation,' Matambo said.

He added that to maintain its relevance, the authority is migrating from the current compliance based methodology for supervision to a risk based supervision business model. 'The risk based supervision model will bring NBFIRA well within the framework of international best practices. It will also facilitate the development and enhancement of financial soundness and efficiency within the non-banking financial services sector,' he explained.