Press Release: The Non-Bank Financial Institutions Sector Remains Resilient

Botswana: The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has published the Annual Report for the financial year ended March 31st 2020, which presents the performance of the Non-Bank Financial Institutions (NBFI) sector and the Regulatory Authority for the 2019/20 financial year.

The Regulatory Authority is empowered by NBFIRA Act and supporting Statutes to regulate and supervise the domestic NBFI sector to foster financial soundness and good market conduct.

The Regulatory Authority remains a going concern with a strong balance sheet and positive cash flows primarily due to the combination of regulated entities performing above expectations as well as the addition of new licensees. The Regulatory Authority recorded a surplus of P 6.4 million in the 2019/20 financial year representing an increase from P 2.5 million recorded in the prior year. As at 31st March 2020, the current assets were P 20.7 million as compared to current liabilities of P 9.0 million.

NBFI Sector Performance

The NBFI sector remained resilient against a backdrop of weak global economic activity, rising trade, geopolitical tensions and slower domestic economic growth.

The sector recorded a moderate increase in the number of regulated entities 747 to 764. The asset base increased by 4 per cent to P126 billion. The market share of assets in the domestic financial services sector was 54 per cent.

The NBFI sector’s capital position stood at P7.5 billion, an improvement from P6.7 billion in the prior year. This was attributable to stronger capital growth. The sector thus remained well capitalised, recording a higher capital ratio of 26 per cent in 2019 relative to 22 per cent in the prior year, attesting to financial soundness of the sector.

The sector’s profitability ratio (return on assets) was 5.8 per cent, which increased from 4.5 per cent in the prior year. Profit before taxes grew from P1.4 billion to P1.7 billion during the period, largely due to an increase in profitability of the insurance and lending industries.
The annual report details industry performance based on the audited statements for the respective financial years ended during the course of 2019 calendar year. Additionally, the period under review ended on 31st March 2020 which coincided with the first COVID-19 national lockdown in early April. Consequently, the 2020 Annual Report excludes the impact of the COVID-19 pandemic on the NBFI sector.

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 four industries being Insurance, Capital Markets, 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 (2016) which repealed the previous NBFIRA Act (2006). The Annual Report is published in fulfilment of the Regulatory Authority’s statutory requirement of Section 34 of the NBFIRA Act (2016). The Report provides key highlights of the NBFI sector performance, the Regulatory Authority’s operations and audited financial statements. The Report is available on the Regulatory Authority’s website www.nbfira.org.bw.

For more information, please contact:
Boa M. Chombah
Head, Communications & International Affairs
Tel: +267 310 2595 / 368 6100
Email: info@nbfira.org.bw; or bchombah@nbfira.org.bw