BoB Report Reveals Slower Growth in Household Loans in 2022

  • Says tightening monetary conditions a key factor
  • Highlights preference for personal loans personal loans over mortgages
  • Details expansion in bank’s branch and ATM network




The household sector has experienced a slower growth trajectory of loans and advances of 4.8 percent from P45.6 billion in 2021 to P47.8 billion in 2022, the Banking Supervision and Annual Report Bank of Botswana (BoB) of 2022 has revealed.

However, despite this growth, the rate was slower compared to the 6.2 percent expansion observed in 2021.

According to the report, the loans were predominantly composed of personal (72 percent), mortgage (22 percent), motor vehicle (4 percent), and credit card and other loans (2 percent).

Motor vehicle loans down

Personal, mortgage, and credit card loans saw varying degrees of growth, with personal loans reaching P34.2 billion, mortgage loans reaching P10.6 billion, and credit card loans reaching P888.9 million.

Conversely, motor vehicle loans experienced a marginal decline of 0.4 percent, dropping to P2 billion in 2022.

The report attributes the deceleration in credit growth to the tightening of monetary conditions, evidenced by the bank’s decision to raise its Monetary Policy Rate (MoPR) during the year.

Furthermore, the report highlights the preference for personal loans over mortgages within the household sector due to the relative ease and speed of obtaining personal loans.

Return on loans up

It notes that many customers opt for personal loans to finance property acquisitions as maximum personal loan amounts have increased over the years across various banks.

Additionally, the report points out that the return on loans and advances increased from 8.2 percent to 9.4 percent, while the interest spread fell slightly from 3.8 percent to 3.7 percent. The average cost-of-deposits ratio also saw an increase from 1.9 percent in December 2021 to 2.6 percent in 2022.

Moreover, the report highlights positive trends in the banking sector, including a rise in the net income-to-employee cost ratio from 89.8 percent to 126.3 percent, resulting in an increase in net income per employee from P412,457 to P611,166.

Assets per employee 

Notably, assets per employee also grew from P24.6 million to P26.3 million, indicating a faster growth in the balance sheet compared to employment levels.

The report also details an expansion in the branch and ATM network, with an increase from 162 to 172 bank branches and a net increase of 46 ATMs, reaching 629 in 2022.

It underscores the role of ATMs in providing convenient and interactive access to various financial products and services.

Regarding the geographical distribution of the branch network, the report reveals a consistent pattern, with the South East District leading at 63 branches, followed by the Central District with 39 branches.

Notably, the branch network saw incremental growth in several districts, including the North West, Central, Kgatleng, Southern, Chobe, and Kweneng districts.