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Botswana’s microlending sector deepens financial inclusion

Economic conditions, regulation and corporate actions have defined the state and size of Botswana financial services sector over the years according to a report by Research and Markets. The country has ten commercial banks that are all foreign-owned and four are listed on the Botswana Stock Exchange. Non-bank finance institutions include microlenders, pawnshops, and finance and leasing companies. With ten commercial banks, just over 500 ATMs and less than 200 branches serving an adult population of about 1.5 million people, most analysts see opportunity for expansion.
Despite these opportunities, no new banks have entered the sector since 2012, and commentators have indicated that outdated regulation and the dominance of foreign-owned commercial banks are factors that potentially keep new entrants out. The microlending sector, on the other hand, is growing and has the potential to increase financial inclusion.
 Large commercial banks continue to introduce more technologies and are moving towards branchless banking. Latest available industry statistics to 2018 reflect a stable, adequately-capitalised banking sector which experienced growing customer deposits and improved profitability.
Botswana has a developed auto market with a high consumer purchasing power and good quality road infrastructure. Increased personal consumption is expected to drive growth in car sales. Growth is also expected in commercial vehicle sales as government promotes increased spending on major capital development projects.
Standard Chartered, which launched Botswana's first digital retail bank in 2019 and BBS, which listed on the over the counter Serala exchange in 2018, Letshego, the leading microlender and development institutions such as Botswana Development Corporation and the National Development Bank have featured prominently in the country’s financial services sector according to the report.

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