10 July 2018

Botswana: Private Sector Should Unleash Fintech Potential

Gaborone — Government expects practitioners from the private sector to facilitate appreciation of the range and scale of financial technology, (Fintech) adaptation and potential, as well as related opportunities and risks it presents.

Giving an opening remarks at a Fintech workshop on financial technology, payments and financial inclusion, Minister of Transport and Communications Mr Onkokame Mokaila said policy makers and regulators were expected to share information that supports assessment of emerging developments towards a meaningful and facilitative policy and regulatory environment.

He said the conference was timely and important for the region, particularly at a time when the global growth momentum is weighed down by low productivity.

The workshop was organised by Bank of Botswana (BoB), International Monetary Fund (IMF) and Bank of Canada (BoC) under the theme; Unlocking the Potential of Financial Innovation for Sub-Saharan Africa, which theme the minister said resonates well with current national strategies for inclusive growth, job creation and poverty reduction.

"I therefore would like to express my sincere gratitude to the Bank of Botswana, the Bank of Canada and the International Monetary Fund for organising this event," he said.

Mr Mokaila said financial technology continued to transform the conduct and delivery of financial services, while embodying great potential to broaden the scope for financial inclusion and ultimately inclusive growth.

He noted that there is no escaping the fact that financial technology is pervasive in all areas of economic and social activity; as well as modern day global interaction.

He said that it should be understood that the impact of technology on economic advancement is not a new phenomenon.

"Fundamental economic analysis suggests that the factors of production - land, capital and labour - cannot generate a sustained increase in the quantity and quality of output without an infusion of new ways of doing things.

Thus, globally, the leaps in growth have always been engendered by new technological innovation," he said

The minister said the world is in the fourth industrial revolution known as the digital revolution and this is characterised by unbounded exponential growth and a fusion of technologies across disciplines and sectors.

He said the current industrial revolution potentially provides a platform for economic and social advancement and inclusive growth; as, indeed, previous technological leaps benefited the earlier industrialising nations that are today's advanced economies.

Mr Mokaila further said enhanced broadband and Fintech have enabled the societies to sustain a rapid pace of financial inclusion, especially with respect to remittances and payments for services and as such Fintech adds impetus to organic growth of the financial sector, as well as help accelerate productivity and expansion for other sectors.

"Fintech is a source of inclusive growth as it provides diversified employment and income earning opportunities, which comprise of economic activities previously not covered by the traditional institutions and markets," he said.

Mr Mokaila indicated that Fintech is a development, whose great potential is recognised and applauded by government in the process of pursuing its economic diversification Drive (EDD) agenda, which includes transitioning to a knowledge economy.

He informed stakeholders that Cabinet recently approved the implementation of a National Broadband Strategy (NBS) whose thrust is to facilitate cost-effective and universal access to ICT and communication ministry is charged with implementation of the strategy with an objective to grow the economy and attain sustainable spin-offs such as in financial inclusion.

"Successfully availing broadband will be key to augmenting financial inclusion through Fintech as an example.

Accordingly, I encourage all of you to work with my ministry or with government to ensure that the implementation of the NBS is a resounding success for the benefit of this economy, in general," he said.

For his part, Bank of Botswana (BoB) Governor Mr Moses Pelaelo said inclusive financial systems were critical for economic growth and sustainable development and, in this regard, Fintech and other innovations, including blockchain technologies, offered hope and promise for fostering financial inclusion in a cost-effective manner.

He said inclusion was the next growth frontier in banking and finance in Sub-Saharan Africa and the workshop intended to explore prospects for unlocking the potential of financial innovation, while preventing possible illegal uses and preserving financial stability.

Other objectives of the workshop include providing a better understanding of the role of digital technology in achieving financial innovation in Sub-Saharan Africa, including smart accounting and contracts, crowd-sourcing, and funding, exploring the growing use of blockchain technologies that allow faster, more flexible and secure payments systems.

Source : BOPA

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