Finscope reports financial inclusion growth
New trends have emerged in the financial services sector, indicators from the latest FinScope Consumer Survey Botswana 2020 have revealed.
The survey has indicated that 1.29 million adults are now financially included in 2020, a rise from one million in 2014. “There has been a marked progress as around 242 947 additional adults are now financially included over the years,” reads part of the Finscope report. The development is attributed to increase across financial mechanisms such as uptake of other formal non- bank products which increased by 20 percentage and uptake of informal financial products or mechanisms, reducing financial exclusion by eight percentage.
Finscope researchers have also noted a slight increase for those salaried in 2020 and significant decline for remittance dependents, as the main source of income. The survey suggested that there is fertile ground to introduce new financial technologies to offer financial services as about 76 percent of Batswana are receptive to learn new technologies, particularly to serve the unbanked and underbanked. “Considering that the unbanked segment have higher secondary education, it could be deduced that they could ‘ easily adopt’ new financial services, given higher literacy rates,” said the report. Meanwhile, the report has also noted an overall decrease in use of credit, as lesser people are borrowing. The report says trends indicate that adults are reducing their credit usage over the years. Some of the factors that consumers have considered when getting a loan include low interest rates, which are a priority for a majority of the adults. Statistics from the Finscope indicate that the overall drop has been identified as four percent decrease in credit applications at banks and an increase in the use of other formal nonbank credit providers by five percentage, while a two percent decrease in informal credit sources – Motshelo, Burial Society, Machonisa was noted.
Meanwhile, speaking at the launch of the survey, Finance and Economic Development Minister, Peggy Serame stated an important roadmap to close gaps in access to finance. “My Ministry, working closely with stakeholders, will assume a primary role in the stakeholder- inclusive development of the roadmap in order to create conditions for better, more inclusive financial access in Botswana,” said Serame who is six months into the Ministry. She challenged participants to commit to the development of an active, action driven implementation plan. “In addition, I would urge financial sector players, as key beneficiaries of the MAP Programme, to also explore ways in which they can financially contribute to the implementation of the MAP and future Surveys such as the FinScope for Small Medium and Micro Enterprises ( SMMEs) which, as reflected in the Post COVID- 19 Recovery Plan of 2020, is important for the development of the SMME sector,” disclosed Serame.