Press Release - Non-Bank Financial Institutions Regulatory Authority Annual Report 2023

PRESS RELEASE

NON-BANK FINANCIAL INSTITUTIONS REGULATORY AUTHORITY ANNUAL REPORT 2023

1. The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) released the Annual Report for the financial year ended March 31, 2023, containing the performance of the Non-Bank Financial Institutions (NBFI) sector and the Regulatory Authority for the 2022/23 financial year.
2. 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

3. The reporting period (2022/2023) was characterised by increasing geo-political tensions, worsening global economic imbalances such as above normal inflationary pressures, tight monetary policy stance and subsequent sluggish economic growth. The domestic economy, however, remained strong and the NBFI sector continued to be relatively profitable, stable and resilient.
4. It the circumstances, the Regulatory Authority continued to pursue the balance between regulating, supervising and easing the regulatory burden in order to foster innovation in fast moving and unpredictable market and economic conditions. Effective mitigation measures were applied to identified emerging strategic risks to contain them.
5. The number of licensed entities increased from 799 in 2021 to 823 in 2022, largely driven by the non-bank lending entities industry. NBFIs total assets grew by five percent from P153 billion to P161 billion between 2021 and 2022, which is noticeably less than the 18.4 percent growth experienced in the prior period. The lower growth is attributable to the latent efforts of COVID-19 in the sector. The sector's total assets accounted for 56.1 percent market share in the local financial services sector, which is a slight decline from 57 percent in the prior year.
6. The sector’s financial soundness and robustness also improved marginally with capital reserves increasing from P8.8 billion in 2021 to P8.9 billion in 2022 mainly in the insurance and capital markets industries. Equally, the same industries recorded higher profits in the reporting period, with lower profitability noted in the Lending Activities. Retirement Funds industry registered a 48.4 percent decrease in total income from P23.6 billion in 2021 to P12.2 billion in 2022, primarily due to unfavourable international market conditions.
7. During the period under review, notable regulatory developments included the commencement of the:

1. Non-Bank Financial Institutions Tribunal (NBFIT) whose mandate is to review the Regulatory Authority and regulated entities decisions to ensure that there is fair, equitable and transparent market conduct;
2. Collective Investment Undertakings Act 2022 which amongst others increases product scope and enhanced supervision and oversight;
3. Retirement Funds Act 2022 which enhanced regulation of fund administration and strengthened the regulator’s oversight responsibilities.

NBFIRA’s Performance

8. The external auditors, Mazars, confirmed 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.
9. The Regulatory Authority generated a total income of P98.1 million in 2023, against total expenditure of P88.7 million, leading to a 19 percent decrease in the surplus from P14.7 million in 2022 to P11.9 million in 2023.
10. As at March 31, 2023, current assets were P59.9 million compared to P46.5 million in the prior year, while current liabilities equalled P18 million and P12.7 million, respectively.
11. Several strategic initiatives were completed during the period under review, inter alia, promoting financial soundness and the release of corporate governance rules for the insurance and capital markets. 

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 five industries being Insurance, 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 (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 Ntebele

Head, Communication & Consumer Affairs

Tel: +267 3102595 / 3686100

Email: info@nbfira.org.bw; or bntebele@nbfira.org.bw