Botswana Building Society

from ODIRILE TOTENG in Gaborone, Botswana
GABORONE – THE Botswana Building Society (BBS) has received a $25 million investment to promote financial inclusion and access to housing finance in the Southern African country.

International Finance Corporation (IFC), a sister organisation of the World Bank and member of the World Bank Group, announced its debut Kgalagadi Bond to provide the finance.

The long-term funding will support the transformation of BBS into a full-service commercial bank financing underserved clients, including small and medium enterprises.

The Kgalagadi Bond, which was over-subscribed, provides the local currency for the IFC loan. It is the first local currency bond issued by a non resident issuer in Botswana.

Pius Molefe, Managing Director of BBS, welcomed IFC’s support to our transformation strategy.

“The financing will enable us to offer conventional banking products at more competitive rates, making us a stronger player in the market,” Molefe said.

BBS is a leading domestically-owned financial institution and the largest residential mortgage lender in Botswana, where only two percent of the population has used housing finance, as most households still use non-mortgage credit.

The transformation of BBS will ensure the envisaged commercial bank enhances financial inclusion and housing finance initiatives as well as compete more effectively against larger local commercial banks.

It help strengthen BBS’s financial stability and assist the demutualized society introduce new products and services for under-served market segments, including small and medium enterprises (SMEs).

Oumar Seydi, IFC Regional Director for Sub-Saharan Africa, said IFC financing to BBS would improve access to finance for job-creating SMEs.

“The bond issuance will mobilize long-term funds in the capital market and channel them to BBS, consistent with our strategy to create markets that promote growth.”

– CAJ News