Press Release - Non-Bank Financial Institutions Regulatory Authority Annual Report 2022

Botswana: The Non-Bank Financial Institutions Regulatory Authority (NBFIRA)  released the Annual Report for the financial year ended March 31, 2022, containing the performance of the Non-Bank Financial Institutions (NBFI) sector and the Regulatory Authority for the 2021/22 financial year.

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

The period under review (2021/2022) was characterised by the residual negative effects of COVID-19 at a global level, however, there are some signs of an economic rebound albeit characterised by slow and uneven growth, high inflation, geo-political tensions, supply-chain disruptions, increased commodity and energy prices.

In response, the Regulatory Authority maintained the facilitative approach to supervision in line with national efforts to mitigate the effects of the pandemic on the performance of regulated businesses, while monitoring the financial stability and soundness of the sector.

In spite of the aforementioned challenging global and domestic environment, the  sector remained relatively stable and sturdy without obvious vulnerabilities in the short to medium term. Licensed entities increased from 786 to 799 between 2020 and 2021, while the sector’s total asset base grew by a noteworthy 18.4 percent from P129 billion in 2020 and P153 billion in 2021, accounting for 57 percent market share in the local financial services sector. This growth is significant when contrasted with the 2.5 percent growth in the prior year, and is largely attributable to the retirement funds industry which continued to dominate the NBFI sector, accounting for 72 percent in 2021.

The sector’s financial soundness and robustness also improved as indicated by the eight percent growth in the capital position from P8.1 billion in 2020 to P8.8 billion in 2021. The changes were mainly driven by lending activities and insurance industries. The NBFI sector’s profitability ratio, however, decreased from seven percent to five percent in 2020 and 2021, respectively mainly due to a reduction in profit for both insurance and lending activities. Overall, these key indicators are reflective of the soundness of the sector.

The annual report details industry performance based on the audited financial statements for the respective financial years ended during the course of 2021 calendar year.

NBFIRA’s Performance

The impact of the COVID-19 pandemic was assessed by external auditors in the annual financial statements and it was noted that the Regulatory Authority remained a going concern.

The Regulatory Authority continued to optimise both the available human and financial resources to achieve the strategic plan objectives for the reporting period.

The Regulatory Authority recorded a four percent increase in total income from P89.3 million in 2021 to P93.3 million in 2022, whilst total expenses decreased by four percent from P82 million to P79.1 million in 2021 and 2022, respectively. The surplus increased from P8 million in 2021 to P14.8 million in 2022, mainly due to the increase in revenue earned from the regulated entities.

As at March 31, 2022, current assets were P46.5 million compared to P29.9 million in the prior year. Whereas current liabilities stood at P12.7 million and P10 million respectively.

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, Communications & International Affairs

Tel: +267 310 2595 / 368 6100

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

• Read Mr. Oduetse A. Motshidisi, NBFIRA Chief Executive Officer speech on , “NBFI Sector Performance Overview”
• NBFIRA 2022 Annual Report
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