NBFIRA Publishes Annual Report 2024 and Statistical Bulletin 2013-2023
The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) released the Annual Report for the financial year ended March 31, 2024, and the 2013 to 2023 Statistical Bulletin. The Annual Report highlights the performance of both the Non-Bank Financial Institutions (NBFIs) sector and the Regulatory Authority for the 2023/24 financial year, while the related Statistical Bulletin provides industry aggregates for financial performance, financial position, capital adequacy and other key financial stability indicators for the NBFIs.
The Annual Report is published in fulfilment of the Regulatory Authority’s statutory requirement stipulated in Section 34 of the NBFIRA Act (2023). The Report provides key highlights of the NBFI sector performance, the Regulatory Authority’s operations and details of the audited financial statements. The Report is accessible from the Regulatory Authority’s website www.nbfira.org.bw.
Download NBFIRA Annual Report 2024
Download NBFIRA Statistical Bulletin 2024
The Regulatory Authority is empowered by the NBFIRA Act and supporting statutes to regulate and supervise the domestic NBFI sector to foster financial soundness and good market conduct.
NBFI Sector Performance
At the global level, the reporting period (2023/2024) was characterised by a slowdown in economic growth due to intensified geo-political fragmentation and associated instability, withdrawal of COVID-19 interventions, lingering high inflation and high borrowing costs (especially for developing economies). There was, however, substantial easing of inflationary pressures in the latter part of the period, with the exception of some parts of the Sub-Saharan region.
Despite the prevailing circumstances, the Regulatory Authority continued to pursue efficiency and efficacy in regulation and supervision and the necessary interventions leading to the reduction of moral hazard and mitigating risks to uphold consumer protection and maintain stakeholder confidence.
The number of licensed entities grew from 822 in 2023 to 867 in 2024, largely driven by the non-bank lending entities that increased by eight percent. NBFIs total assets grew by seven percent from P150.4 billion to P160.6 billion between 2022 and 2023, which was greater than the five percent reported in the prior period. The sector's total assets accounted for approximately 54 percent market share in the local financial services sector, implying a slight decline from 56 percent in the prior year.
The sector’s financial soundness and robustness also improved with capital reserves increasing from P9.8 billion in 2022 to P13 billion in 2023, mainly in the retirement funds industry. The sector’s profits decreased by four percent from P1.8 billion to P1.7 billion between 2022 and 2023. The movement was mainly due to increased expenditure attributable to a substantial growth in net impairments on financial assets of one of the Systemically Important Microlenders (SIMLs). The sector’s total revenue increased by 18 percent from P22 billion to P26 billion between 2022 and 2023. Positive revenue growth was recorded by all NBFI industries, however, retirement funds contributed significantly to the revenue growth by 29 percent from P12 billion to P16 billion between 2022 and 2023.
The Herfindahl-Hirschmann Index (HHI) for the NBFI sector’s assets, liabilities, capital and reserves ranged between 2,500 and 10,000 implying that the NBFIs’ concentration risk is high and requires close monitoring to guard financial stability.
During the period under review, notable regulatory developments included the commencement of the:
- NBFIRA Act (2023) in January 2024, being the Umbrella Act of Financial Services Laws for regulating and governing the operations of both the Regulatory Authority and the NBFIs.
- Framework designating Domestic-Systemically Important Financial Institutions (D-SIFIs) in the insurance sector, which are entities that are ‘too-big-to-fail’ given their significant size and potential impact on the broader financial system and the larger economy. Three D-SIFIs are subject to enhanced supervision in accordance with the requirements of the framework.
- Work is underway on the development and enhancement of several other pieces of legislation, including but not limited to, the Insurance Industry Act, Medical Aid Fund Bill and the Virtual Assets Act and the review of the Retirement Funds Administrative Rules.
NBFIRA’s Performance
The external auditors, Forvis Mazars, certified that the Regulatory Authority remained a going concern and continued to optimise both human and financial resources to achieve the strategic plan objectives for the reporting period.
As at March 31, 2024, current assets were P52.7 million compared to P59.9 million in the prior year, while current liabilities equalled P18.2 million and P19.6 million, respectively.
Several strategic initiatives were completed during the period under review, including but not limited to, the development of the Domestically Systemic Insurance Financial Institution (DSIFI) Framework for the insurance sector and the automation of the Anti-Money Laundering (AML) processes on the Risk Based Supervisory System. Ongoing initiatives include the updating of the risk based regulatory framework.
Notes to Editor:
About the Non-Bank Financial Institutions Regulatory Authority (NBFIRA)
Established by an Act of Parliament in 2006, the Regulatory Authority began its operations in 2008 and regulates and supervises the Non-Bank Financial Institutions (NBFI) sector which comprises six industries being Insurance, Medical Aid Funds, Capital Markets, Virtual Asset Businesses, Retirement Funds and Lending Activities.
The Regulatory Authority is additionally responsible for ensuring compliance to local and international obligations regarding Anti-Money Laundering & Combatting the Financing of Terrorism and Proliferation (AMLCFT&P) within the NBFI sector.
Since inception, the Regulatory Authority has achieved significant regulatory and supervisory milestones that have enabled the NBFI sector to grow and operate in line with international standards and best practices.
The Regulatory Authority is governed by the NBFIRA Act (2023) which repealed the previous NBFIRA Act (2016). For more information, please contact:
Boa Ntebele
Head, Communication & Consumer Affairs
Tel: +267 3102595 / 3686100
Email: info@nbfira.org.bw; or bntebele@nbfira.org.bw
