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BOTSWANA

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  • pg 1
									BOTSWANA                                                      2004



FinScope Africa
Nairobi, November 2007

Botswana Profile
Summary of FinScope 2004 Results

Keith Jefferis



                                           SOUTH AFRICA
                                                          1

                                                               2004




   Botswana Country Profile

   •Population:
       –small (1.8m)
       –sparsely populated (3 persons per sq km)
       –urbanised (54%)
       –slightly more females (1.07 per male)
       –ethnically fairly homogenous (78% Setswana)
       –young population (51% < 20) but av. age increasing
       –HIV/AIDS a major problem (24% adult prevalence)
       –life expectancy approx. 50 years
       –population growth approx. 1.5%
       –10 years of universal education
                                                          2

                                                               2004
Botswana Country Profile

•Economy:
   –High income by SSA standards (GDP/cap $6000)
   –Economy dominated by diamonds (35+% of GDP)
   –Large government (revenues 40% of GDP; govt. 40%
    of employment)
   –High poverty rates (32% below national PDL)
   –High inequality (Gini 0.57)
   –High unemployment for middle income country
    (approx. 20%-25%)



                                                      3

                                                          2004




Botswana Country Profile

•Financial Sector:
   –6 commercial banks, all majority foreign owned
   –3 govt. banks, set for privatisation
   –Highly liquid (loans < 50% of deposits)
   –Lending concentrated on households (58%)
   –Highly profitable (ROE 50%)
   –Concentrated in urban & large settlements
   –Large & rapidly-growing pension industry
   –Small micro-lending sector
   –Banking sector growth has been dramatic, but future
    sources of growth a key issue
                                                      4

                                                          2004
       FinScope 2004 Results


                                                                                  2004




                                                                              5

                                                                                   2004




      Landscape of access in Botswana

                     % of the                  Transactions
                                                 100
                     respondents
                     (% of adult pop)            75


                                                 50    43%

                                                 25


                      Insurance         33%       0           51%   Savings


                                                   21%




                                               Credit/loans



                                                                              6
Base: Total n=1200; Urban n=391; Rural n=809
                                                                                   2004
      The informal financial system pushes out the
      boundaries of the access landscape
                                                      Transactions
                                                       60.0

                                                       50.0

                                                       40.0                       FinScope Formal
                                                              43.1
                                                                                  sector
                                                       30.0

                                                       20.0

                                                       10.0
                                                                                     51.3
                          Insurance            27.7     0.0                43.0             Savings
                                        32.5                   `

                                                              17.7


                                                                   20.6


                                                                             FinScope
                                                                             Informal sector




                                                      Credit/Loans




                                                                                                              7
            n=1200
Base: Total n=1200; Urban n=391; Rural n=809
                                                                                                                  2004




      Landscape of access: urban and rural differences
      are significant

                                                Transactions
                                                      100                                             Total
                                                                                                      Urban
                                                       75
                                                      36%            57%                              Rural

                                                       50


                                                       25
                                      49%                                          65%
                     Insurance                          0                                   Savings
                                      25%                                          45%


                                                      17%          29%




                                                 Credit/loans



                                                                                                              8
Base: Total n=1200; Urban n=391; Rural n=809
                                                                                                                  2004
      Product usage by main categories

           70
                        65
                                                                                              Total
                                                                                              Urban
           60                                   57
                                                                                              Rural
                   51
                                                                    49
           50
                             45
                                           43

           40                                        36
          %                                                    33
                                                                                         29
           30
                                                                         25
                                                                                    21
           20                                                                                 17


           10


              0
                     Savings               Transactions        Insurance            Credit/loans




                                                                                                       9
Base: Total n=1200; Urban n=391; Rural n=809
                                                                                                           2004




    Top line data on level of access show fairly high
    levels of financial usage
      54% of the sample are financially included i.e. use formal and/or
       informal products

      49% of respondents use formal services and 32% use informal



                                         Total sample n=1200

                               Formal                                    Informal
                               service                                    service
                                usage                                      usage
                                            22%       27%      5%




                                                                                                      10

                                                                                                           2004
     Usage of banking products

                                                                                              43% of respondents surveyed are
                                                                                               banked, and another 4% report using
                                                                                               banking products/services through
                                                                                                               s
                                                                                               somebody else’ account (mainly ATM
                                                                                               cards, savings/transaction account and
                                                                                               savings book).


                                                                                                                          Not banked
                                                                                                                              47%


            Currently banked                                     Un-banked
                  43%                                               57%

                                                                                       Previously banked
                                                                                              10%




                                    Currently banked                            Previously banked              Not banked


Base: Total n=1200
                                                                                                                                                         11

                                                                                                                                                                                  2004




         Banking status by sub-groups
Gender                 Male              46                           54               Marital Status                  Single         38                           62


                                         41                       59                                      Divorced/separated                    71                           29
                     Female

                                                                                                                   Widow ed          29                        71

                                                                                                                     Married               59                           42
Age Group        18-19 years       15                       85
                                                                                                                Living w ith a
                                                                                                                                          46                        54
                                                                                                                   partner
                 20-29 years             44                        56

                 30-39 years                  54                       46
                                                                                       Region                          Urban               57                           43
                 40-49 years             46                           54
                                                                                                                        Rural         37                           63
                 50-59 years             45                        55


                   60+ years            38                        62
                                                                                       District                    Gaborone                    69                         31

                                                                                                                Francistow n                   63                        37

Head of         Head of H/H                   55                       45                                             Tow ns               56                           44
Household
             Not Head of H/H            35                       66                                           Other Districts        36                            64

                               0         20        40       60             80    100                                             0    20            40        60         80        100

                                                        %                                                                                                %

Base: Total n=1200      %
                                                                                      Low usage of banking products/services among those 12 18-19 years
                                                                                                                                             aged
              Banked        Un-banked                                                 Relatively higher usage of banking products/services among those aged
                                                                                       30-39 years, heads of households and among urban respondents
                                                                                                                                                                                  2004
       Banking status by sub-groups (continued)

Educational          No formal education          15                       86                               Monthly                No income 11                            89
Level                                                                                                       Personal
                    Some primary school                31                       69                          Income                P250 or less        23                       78


                  Primary sch. completed               31                       69                                                  P251-P500          34                           66


                        Some high school                40                          60                                            P501-P1,000                   59                       41


                     High sch. completed                    45                       55                                          P1,001-P5,000                        91                      9


                   Post high sch. (not uni)                      82                            19                            More than P5,000                             98                  2


                                Some uni                              98                            2


                           Uni completed                              98                            2       Main Income                     MIE                 63                       37
                                                                                                            Earner
                                                                                                                                      Not MIE          32                       68

Employment            Full-time employed                         81                            19
Status
                      Part-time employed               31                       69                          Household             Owns house           35                           65
                                                                                                            Owns/Rents
                             Unemployed            26                       74                              House                 Rents house                   67                       33

                                              0         20       40        60             80        100                                           0        20        40        60        80   100

                                                                      %                                                                                                   %
Base: Total n=1200             %
                                                                                                       Significantly higher usage of banking products/services13
                                                                                                                                                               among well-
                   Banked          Un-banked                                                            educated people, those in full-time employment, higher income earners as
                                                                                                        well as main income earners
                                                                                                                                                                                              2004




      Reasons for not having a bank account –urban v rural

                                              Others (<2%)                           4
                                                                                     4                                                                                              Rural
                                                                                2
   Have to keep a minimum balance in the bank                                                                                                                                       Urban
                        I o ’n e a a k c o n
                         d nt e d b n a c u t                                   2
                                                                                2
                                                                                                                   The same pattern of responses is observed
                                     I o ’t s b n s
                                      d ntr t a k
                                           u                                     3                                  among urban and rural respondents as
                                                                                2
                                                                                                                    regards the reasons for not banking.
                         Bank charges are too high                                   4
                                                                                2
                                                                                         5                         However, a slightly higher proportion of
              The bank is too far from where I live                         1                                       respondents from rural regions find the
                                                                                     4                              distance to get to the bank as a problem.
         t e p n i o a e b n ac u t
          ’      v
         Is x e s et h v a a k c o n                                                 4

                 I o ’q a f t o e a a c u t
                  d nt u ly o p n n c o n
                         i                                                               5
                                                                                2

          I o ’k o h wt o e a a c u t
           d nt n w o o p n n c o n                                                       6
                                                                                     4

              I earn too little to make it worthwhile                                              10
                                                                                                   10

                         I o ’h v m n y os v
                          d nt a e o e t a e                                                           14
                                                                                                     12

                     I o ’h v a e ua ic m
                      d nt a e rg l n o e
                                    r                                                                                                  37
                                                                                                                                            40

                                      I don't have a job                                                                                                                              62
                                                                                                                                                                                     61


                                                                       0                       10              20          30          40                  50                  60             70
                                                                                                                                  %
Base: Un-banked Urban n=169; Rural n=510                                                                                                                                  14

                                                                                                                                                                                              2004
Users tend to be urban, employed, higher income earners,
educated and in their thirties..
 There is low usage of both formal and informal financial
  products/services among those aged 18-19 years. However, they
  are more likely to use formal financial products than informal
  ones.

 Significantly higher usage of financial products/services among
  well-educated people, those employed full-time and high income
  earners

 The main disincentive to having a bank account is unemployment
  and low incomes. Having to pay service fees, documentation
  required to open an account and the need to keep a minimum
  balance, etc. are barriers to banking, but not the main ones.


                                                                    15

                                                                            2004




 Learnings from FinScope 2004

 • Need to involve banks at an early stage of questionnaire development
 • Banks need guidance in using data –     overload and insufficient
   analytical capacity
 • Needs more support for banks to mine, analyse & understand uses of
   the dataset
 • Participation of banks (largely) driven by keen individuals
 • Survey expensive in a small, sparsely populated, high-cost country -
   difficult to build a fully cost-covering funding coalition
 • Has provided a unique data source (“                )
                                           public good” - an invaluable
   contribution to taking the access debate forward & for banks to “ bank
   the unbanked”
 • FSM measures didn’make an impact
                          t



                                                                    16

                                                                            2004
                 2004




Thank You


            17

                  2004

								
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