Press Release - The Non-Bank Financial Institutions 2021 Annual Report- Resilient Through the Pandemic
NBFIRA 1/9/6 – I (15)
Botswana: The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has released the Annual Report for the financial year ended March 31, 2021, containing the performance of the Non-Bank Financial Institutions (NBFI) sector and the Regulatory Authority for the 2020/21 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.
NBFI Sector Performance
The outbreak of the COVID-19 pandemic set a difficult global stage for countries, industries and individuals alike. A severe contraction of global economic activity in the first half of 2020 was reflected by the decline in global GDP of 3.3 percent, a state of affairs worse than that recorded in the global economic and financial crisis of 2008/2009. In response, the Regulatory Authority adopted a facilitative regulatory approach in line with the international efforts to mitigate the effects of the pandemic on the performance of regulated businesses.
Notwithstanding the unprecedented developments, the NBFI sector shone hence closing the reporting period with a 2.9 percent increase in active entities from 764 in 2019 to 786 in 2020, as well as a 2.5 percent growth in assets compared to the prior year. With total assets of P129 billion in 2020, the NBFI sector retained the dominant share of 54 percent in the domestic financial services sector.
The sector’s capital and profitability positions were stable in spite of the COVID-19 pandemic. The capital position increased from P7.5 billion in 2019 to P9.2 billion in 2020 demonstrating the financial soundness and resilience of the sector. The profit before tax increased from P1.7 billion in 2019 to P2 billion in 2020, while the return on assets grew from 5.8 percent in 2019 to 6.8 percent in 2020.
The annual report details industry performance based on the audited statements for the respective financial years ended during the course of 2020 calendar year.
NBFIRA Performance
The impact of the COVID-19 pandemic was assessed by the Regulatory Authority in the annual financial statements and it was noted that the Regulatory Authority remained a going concern. The COVID-19 national restrictions experienced during the period under review resulted in less activity in some months of the year. The Regulatory Authority generated total income amounting to P89,285,105 representing an increase of 2 percent from the prior year, as well as expenditure of P81,961,297 representing a slight increase in operating expenses by 0.2 percent. The net impact of the increase in revenues and stable costs resulted in a 24 percent growth in the surplus. As at March 31 March 2021, current assets were P29.9 million compared to current liabilities of P10.1 million. Despite the challenges brought about by the COVID-19 pandemic, the Regulatory Authority implemented the strategy, without sacrificing any of the key objectives and initiatives.
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 Ntebele
Head, Communications & International Affairs
Tel: +267 310 2595 / 368 6100
Email: info@nbfira.org.bw; or bntebele@nbfira.org.bw
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