‘ Non- bank financial institutions strong’
Total assets grew double digit y/ y Sector’s capital position closed at P8.8 New laws, regulations implemented
Botswana’s multi- billion Pula non- bank financial institutions’ sector, remains sound, despite a myriad of challenges which has besiege the domestic economy in the past few years.
This is the message that came out clearly from Non- Bank Financial Institutions Regulatory Authority( NBFIRA) Chief Executive Officer Oduetse Motshidisi when briefing the media on the recently launched 2022 annual report.
Figures shared by the Authority clearly indicate the sector has been robust, even in the midst of COVID 19, which negatively impacted many sectors of the economy. In his prepared speech, Motshidisi said total sector assets grew by 18.4 percent from P129 billion in 2020 to P153 billion in 2021. This is in comparison with the 2.5 percent growth in the prior year. “The growth in total sector assets was largely driven by the retirement funds industry which continued to dominate the NBFI sector, accounting for 72 percent of the sector assets in 2021,” he explained.
Furthermore, lending activities, capital markets and insurance assets increased by 19 percent, 45 percent and four percent, respectively, albeit from lower bases. The sector’s capital position improved by eight percent from P8.1 billion in 2020 to P8.8 billion in 2021, mainly on account of changes in the lending activities and insurance. Meanwhile, writing in the Authority’s annual report, Motshidisi told the media that, a number of legal reforms have been introduced in the NBFI sector to improve regulation of NBFIs and enhance stability, safety and soundness of the sector. Some of the new legislation include the Collective Investment Undertakings ( CIU) Act, which was amended and commenced in February 2022, to include emerging sub sectors such as partnerships. The medical aid funds sector, which has been regulated under the NBFIRA Act, has sufficiently matured to warrant an Act of Parliament geared towards addressing the specific needs of the sector. The Retirement Funds Act ( 2014) and its Regulations ( 2017) have been reviewed with the objective of ensuring that the Act remains relevant and effective in regulating the pension fund industry, among others, to include fund administrators’ business, enhance funds governance and attain alignment with international best practice.
NBFIRA has also been as the regulatory authority for Virtual Assets Service Providers. A new Act ( Virtual Assets Act, 2022) and the Virtual Assets Regulations, 2022 were introduced and implemented, effective February 2022. The Act regulates virtual assets businesses and their operators in Botswana, with primary focus on risks associated with virtual assets in the context of emerging business practices and technologies.