12 Feb 2014

Banks are supposed to determine whether they want commercial presence in rural areas taking cognisance of the infrastructure provided, said the Assistant Minister of Finance and Development Planning, Mr Vincent Seretse.

Answering a question asked by MP for Shoshong, Mr Phillip Makgalemele in Parliament on February 10, Mr Seretse said there was no policy dictating to the banks where they should open their branches. He said, however, that his ministry continued to amend legislation relating to the financial and banking sector to ensure an enabling environment.

Government, he said, continued to come up with financial sector policies such as Credit Reporting System and Financial Inclusion. He noted that banks and other financial entities were extending their presence to rural areas in a number of innovative ways, including through mini branches, mobile branches, ATMs, Internet and cellphone banking, point of sale terminals and smartcard technologies.

These and other alternative technology-based means of delivering bank services, he said, were dramatically changing the financial landscape and reducing the relative costs compared to the “brick and mortar” models of providing banking services in the country.

He said some of these technologies allowed for a wide range of operations such as making deposits, withdrawals, payment instructions, transfer of funds and other conventional banking services. Mr Seretse further said National Development Bank has launched mobile banking for the northern and southern side of the country.

The recent merger between Botswana Savings Bank and Botswana Post, he said will ensure commercial presence in the rural areas since post offices are accessible nationwide.

He said banks had competitive strategies on how to extend service to clients including those in the rural areas thus strategies made directly by the financial sector to improve accessibility of products to the rural population will ensure that a majority of the population is included in the financial and banking sector by the end of NDP 10.

In addition, he said the government had also taken positive steps including provision of physical infrastructure such as roads, water, electricity and telecommunications to most rural areas. MP Makgalemele had wanted to know the progress made in attracting banks to rural areas since Parliament approved a motion calling for such development last March.

He also wanted to know specific interventions the minister of Finance and Development Planning has already employed and those to be deployed during the remainder of NDP 10 and anticipated results from those strategies at the end of NDP10.   ENDS