Botswana’s finance ministry is working with the World Bank on a study to strengthen the country’s credit reporting system, Finance Minister Kenneth Matambo revealed here Thursday.
“The outcome of this study will go a long way in creating a sound and fair extension of credit to businesses and consumers because lending institutions will have access to credit information of clients,” Matambo told parliament.
PANA reports that micro-lenders in Botswana charge high interest rates up to 35% interest rate on loans and currently Botswana prime rate is 9.5% while interest rate charged by companies on an unsecured loan ranges from an average of 15.5 percent to 21.5 percent.
Through continuous reduction in the bank rate, Botswana intends to promote higher rate of economic growth and employment creation through an increase in demand and investment.
“A change in the bank rate signals direction of monetary policy based on Bank of Botswana’s assessment of the outlook for inflation and economic performance,” the minister said.
In October, Bank of Botswana’s (BoB) Monetary Policy Committee (MPC) retained the country’s bank rate at 8 percent.