16 Jul 2015

About 24 per cent of Botswana’s population, with majority living in rural areas, does not have access to financial services, according to a research conducted by Finscope.

The 2014 survey conducted in partnership with government through ministry of Finance and Development Planning indicates that although there are opportunities for growth in the sector, 100 per cent of public service officers however use banks.

According to the survey, 50 per cent of the adult population use banks, 18 per cent use other formal facilities other than banks, 8 per cent use informal only while 24 per cent do not use financial services.

This has shown an improvement over the 2009 survey which stated that 45 per cent of the population used banking facilities while 31 per cent did not have access to financial services at all.

The survey shows that more people in developed areas, such as cities, towns and major villages, have access to financial services than those that reside in rural areas.

Only 14 per cent of people residing in cities do not use any financial products or services compared with 36 per cent in rural areas. 

Further, 71 per cent of people in urban areas use banking facilities, while in rural areas only 26 per cent do so.

 There is also disparity of access to services amongst males (79 per cent) and females (73 per cent).

However, the survey indicates that there are overlaps as some people do not only use one type of financial service, as others use all three or combine any of the two services.“Consumers generally use a combination of financial products and services to meet their financial needs as an individual can have a bank account and also belong to a burial society,” the report states. 

Finscope states that only 7.3 per cent of adults rely exclusively on banking services while 31.2 per cent use a combination of formal and informal mechanisms to manage their financial needs, thus indicating that their financial needs may not be fully met by the formal sector alone.

It is stated that 8.2 per cent of the adult population only rely on informal mechanisms such as village savings and loan groups (metshelo) to save or borrow money.

The survey shows that banking is driven by transactional products, savings, credit, remittances and insurance. 

Other formal sector, non-banking, is driven by savings, remittances, insurance and mobile money. Savings, burial societies, credit and remittances drive the informal sector.

Finscope found that 50 per cent of adults are banked majority of them 67 per cent, for safety reasons, to receive salary from an employer and to help one to obtain easy access to loans.

For those who do not use banks, they claim they do not need it. Some said they cannot maintain minimum balance and other stated high service charges.

On Mobile Money, it is said 22 per cent of Batswana use mobile money. ENDS