Despite receiving a loan of P105 million in 2015 to facilitate the acquisition of a commercial banking license, Botswana Savings Bank has yet to acquire, or even apply for, the license.
According to CEO Nixon Marumoloa, the timeline for the license application and BSB's subsequent transition to a commercial bank is still "unknown".
"Privatisation is still a shareholder conversation. Its implementation timelines and structure are still largely unknown, the Bank, however, continues to strengthen its governance and build the foundational elements towards its commercialisation objectives, delivering value to the Shareholder," Marumoloa said in BSB's annual report.
Established by Parliament in 1992, Botswana Savings Bank was created as a government-owned financial institution to provide inclusive banking and financial services to Batswana, particularly in underserved communities.
For much of its history, BSB operated as a traditional savings institution focused on deposit mobilisation and small loans. The Transition Act of 2012 allowed for its conversion into a public company, to be renamed Botswana Savings Bank Limited, but the government deferred the move until "further notice".
In July 2015, the bank received a subordinated loan from the Government of Botswana for a period of 20 years, from July 2015, inclusive of an initial grace period of two years during which interest will be payable, with the principal repayable over the remaining eighteen years.
The loan was initially obtained for the purposes of facilitating the submission of an application for a banking licence to the Bank of Botswana, which is required for the commercialisation of Botswana Savings Bank. The delay in the process has thrown a spanner in the works for BSB.
"As the bank’s application for a banking licence had not yet been submitted, the bank was in violation of specific loan covenants, and the loan had become callable at notice. The bank renegotiated the loan agreement with the lender, and the breach was remedied. The loan is repaid annually, and interest accrues at 5% per annum on the amount outstanding and is fixed over the loan term. The loan was converted to a subordinated unsecured facility during the year ended March 2022," the bank clarified.
The Commercialisation Dream Lives On
Despite the deference, the bank still has the transition as one of its key goals. In 2025/26, the bank will take a gap year to close off the outstanding strategic milestones. The gap year aims to ensure that by the time the Bank enters commercialisation, all necessary foundational business systems and structures are aligned with the demands of the commercial environment.
Some key priorities during the gap year include automation, fintech partnerships, data-driven banking, cybersecurity evolution, and introducing a merchant app & digital wallet.
"The privatisation agenda, led by the Government of Botswana through PEEPA, remains a key part of BSB’s strategic horizon. The exact structure and outcome of this process will be determined through ongoing engagements with relevant stakeholders," added Marumoloa.
"Nonetheless, the Bank’s primary focus remains value creation and long-term sustainability—through strong governance, operational discipline, and market competitiveness. The journey toward obtaining a commercial banking licence remains firmly embedded in our roadmap. We view this as a pivotal enabler that will allow BSB to compete on equal footing, unlock new markets, and deepen its developmental impact."