NBFIRA May 2025 e-Newsletter on Financial Stability and Consumer Protection

1 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” e-Newsletter MAY 2025

• Loan Agreement Requirements
• Cooling-off Period
• Pension Members and Beneficiary payout
• Understanding the Terms and Conditions for Retail Investors IN THIS ISSUE: “NBFIRA....Working Towards Financial Stability”

2 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” ABOUT NBFIRA Plot 54351, New CBD • Off PG Matante Road • Gaborone Private Bag 00314 • Gaborone • Botswana Tel: +267 310 2595/368 6100 Fax: +267 310 2376 “NBFIRA... Working Towards Financial Stability”

Consumer Protection The Regulatory Authority has the responsibility to protect consumers by mediating complaints between members of the public and regulated entities, where the concerned parties have failed to reach an amicable solution. Do you have a Complaint? ……. Exhaust all complaint channels within the entity and then follow NBFIRA complaints procedures available on our website. MANDATE The Regulatory Authority derives its mandate to regulate and supervise Non-Bank Financial Institutions (NBFIs) from Section 4 of the NBFIRA Act, 2023 (CAP 46:08). The principal objective of the Regulatory Authority is to foster the following: 3 Safety and soundness of the NBFIs; 3 The highest standards of business conduct by the NBFIs; 3 Fairness, efficiency and orderliness of the NBFI sector; 3 Stability of the financial system; and 3 Reduction and deterrence of financial crime. VISION, MISSION AND VALUES To support its fundamental and principal objective, the Regulatory Authority subscribes to the following vision, mission and values statement in order to embrace a culture of a high performance organisation. VISION: 3 To be an effective and efficient NBFI regulatory and supervisory authority in line with international best practice. MISSION: 3 To regulate and supervise non-bank financial institutions for the purpose of contributing towards financial stability. VALUES: 3 Integrity: Adherence to the highest ethical standards. 3 Transparency: Openness and frankness in operations. 3 Fairness: Consistent promotion of equal treatment in dealings with all stakeholders 3 Accountability: Responsibility to stakeholders. 3 Diligence: Thoroughness and persistence in the execution of duties.

3 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” Know Your Customers (KYC) Thank you for showing intrest in our services, may I please know the source of your funds Sir? La bo le ka simolola! Gore ke tsaya kae madi go le ama jang? Fa le sa batle ke tla ya go reka ko go ba babangwe. Kana le tsaya gore ke a utswile. Termination of KYC non-compliant business relationships Did you know that all non-bank financial institutions are required to terminate, and report to the Financial Intelligence Agency, any existing business relationships with customers through written notice to the customer, where the non-bank financial institution is unable to obtain and verify KYC information. 3rd floor Exponential Building Plot 54351, New CBD • Off PG Matante Road • Gaborone Private Bag 00314 • Gaborone • Botswana Tel: +267 310 2595/368 6100 Fax: +267 310 2376 info@nbfira.org.bw www.nbfira.org.bw NBFIRA. Working Towards Finacial Stability (Sections 26 (1) (b) & 26 (2)) of FI Act 2019) ANTI MONEY LAUNDERING & COUNTERING THE FINANCING OF TERRORISM AND PROLIFERATION (AML/CFTP) Nnya Rra. We just want to know your source of income so that we can profile you accordingly. Knowing your source of income helps us to assess your expected transactional activity as well as establish whether or not the funds were obtained from illegal activities. Ohh! Okay now I understand. Ke a tsaya ko tirong. Here is my proof of income. Did you know that all Non-Banking Financial Institutions (NBFIs) are required to terminate, and report to the Financial Intelligence Agency (FIA), any existing business relationships with customers through written notice to the customer, where the NBFI is unable to obtain and verify KYC information?

4 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” BE ADVISED:

1. A Micro Lender means an entity that provides access to short term credit to a borrower.
2. Make sure you read and understand the loan agreement before you sign.
3. Microlending Regulation 11 (1) states that a Micro Lender shall ensure that a loan agreement concluded with a borrower: 3 Is written in clear and simple English or Setswana; and 3 Is clearly interpreted to the borrower where the borrower cannot understand the language used in the agreement.
4. Regulation 11 (4) states that a micro lender shall, before concluding a loan agreement with a borrower; 3 Provide the borrower, with an opportunity to read the loan agreement, or have it read to him or her where the borrower is illiterate; and 3 Explain to the borrower in a language understood by the borrower, the essential terms of the loan agreement so as to ensure that the meaning and the consequences of the loan agreement are understood. Loan Agreement Requirements Koko, Dumelang. Ke bidiwa Mma Tebogo. Ke tlile go ikopela thuso ya madi a kadimo. Dumela Mma Tebogo, o amogelesigile mo diofising tsa rona. Ngwanake o kobilwe ko sekolong jaanong ke kopa P10,000 gone jaanong. Mma Tebogo, pele ga o baya monwana, kopa tlhaloso ka botlalo mogo se o se beelang monwana pele o thusiwa. Mma Tebogo, baya monwana fa le fa re tle re go neele madi. Nnyaa ngwanaka, ga ke tlhaloganye ditsetlana le melawana. Ke kopa o ntlhalosetse ka botlalo pele ga ke baya monwana. O bua nnete Mma Tebogo, ona le tshwanelo ya go itse le go tlhaloganya ka botlalo pele o thusiwa. Molao wa NBFIRA wa retlama gore re go tlhalosetse se ose beelang monwana. Ee Mma Tebogo. Ke lebogetse tlhaloso, oka mpha pampiri ka baya mowana jaanong.

5 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” Yes buddy, have you started using the money yet? No, kana those goats have been purchased now I dont need the money, ke gore what am I going to do? You can return the money at no cost, akere it has been less than 48 hours? Ao!! I can? It’s your right under the Micro Lending Regulations. Obakeng do you remember that loan I got this morning? BE ADVISED:

1. A Micro Lender means an entity that provides access to short term credit to a borrower.
2. Regulation 12: A Micro Lender shall, in terms of the provisions of the loan agreement allow the borrower to terminate the agreement within at least two days after the signing of the loan agreement or approval and shall not charge the borrower any fee for the termination, provided that: 3 Where the principal amount has been advanced to the borrower, the borrower shall simultaneously repay the amount advanced; and 3 The micro lender is entitled to charge the borrower the prorated cost of credit.
3. Do not sign up for something you do not understand. Cooling Off Period Plot 54351, New CBD • Off PG Matante Road • Gaborone Private Bag 00314 • Gaborone • Botswana Tel: +267 310 2595/368 6100 Fax: +267 310 2376 “NBFIRA... Working Towards Financial Stability” Cooling Off - “You have 48 hrs to change your mind with no termination cost and interested prorated to interest for two days” Regulation 12 A micro lender shall, in terms of the provisions of the loan agreement, allow the borrower to terminate the agreement within at least two days after the signing of the loan agreement or approval, where that happened earlier, and shall not charge the borrower any fee for the termination:

6 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” TSWII PENSION FUND Dumelang botsadi, ke tsile hano go botsolotsa kele ngwana wa ga moswi Mme Mosinki, ke bidiwa Moreo Mosinki. Mme o ne a ntaetse a santse a le mo botshelong, gotla go botsa ko go lona tse re tlaa di atswiwang gore tshetsa motlhang a retlogelang. Ke jaaka ke tsile jaana. BE ADVISED:

1. ALLOWABLE DEDUCTIONS: Section 52 (1) (a) of the Retirement Funds Act (2022) provides the criteria for allowable pension deductions to a member. Regulation 29 sets out the criteria for payment of death benefits to a member’s nominees and beneficiary, in the event of the death of a member.
2. INFORMATION PERTAINING TO BENEFICIARIES: The Retirement Funds Regulations 37 and 38 provide guidance on information required from beneficiaries and information for beneficiaries respectively.
3. ACCESS TO OR DISCLOSURE OF BASIC INFORMATION: Pension Fund Rules (PFR10) - Members and beneficiaries of pension funds, as well as potential fund members, have a legal right to access to or disclosure of basic information about the pension plan including adequate information regarding their rights of access and waiting periods, anticipated contribution and/ or benefit actual rates, claims processes or procedures etc. Pension Member and Beneficiary Pay Out O amogelesigile mma, ka go bo gole maleba gore o tswe o tlhalogantse dikatso tse di lo lebaganeng lo le bana ba ga moswi mmalona Mma Mosinki. Le tshwanetse le gore yo o duelwang a e go kwadisa dituelo kopo, e ka sekgoa re e bitsang “Claim”. Go botlhokwa ebile ke tshwanelo gore fa o lebaganwe ke dituelo tsa phenshene, o itse gore leloko la phenshene le ne le beeletsa phenshene ya lone kae, e le ya mofuta ofe, e solofetsa dituelo tsa bokae, nako ya dituelo e kae, kopo (claim) di tsamaisiwa jang. Are You a Member of a Pension Fund? Active Member – is a member who is still actively contributing (saving) towards their retirement, within a pension fund. Deferred Member - is a member who no longer contributes to the fund, but who still has their benets preserved and has preserved pension rights within the fund. Pensioner Member - is a member who has reached retirement age and/or end of their term of service where applicable and/or is receiving their monthly pension income. Remember

As a pension fund member, it is important to understand which type of membership you have within a particular pension fund. Make sure to provide up to date information to your pension fund. Ensure that your tax clearance is up to date so that the processing of your pension payout is not delayed. Keep yourself informed of the new changes applicable to your membership type. NBFIRA … Working Towards Financial Stability 3rd Floor Exponential Building Plot 54351, New CBD • Off PG Matante Road • Gaborone Private Bag 00314 • Gaborone • Botswana Tel: +267 310 2595/368 6100, Fax: +267 310 2376 info@nbfira.org.bw, www.nbfira.org.bw Active Member- is a member who is still actively contributing (saving) towards their retirement, within a pension fund. Deferred Member- is a member who no longer contributes to the fund, but who still has their benefits preserved and has preserved pension rights within the fund. Pensioner Member- is a member who as reached retirement age and/or end of their term of service where applicable and/or is receiving their monthly pension income.

7 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” PRINCIPLES:

1. The purpose of an investment is to get a return on funds invested, whether in the short, medium or long term.
2. Ensure to ask your investment adviser sufficient questions about an investment prospectus until you are satisfied that the information you have been provided with will enable you to make an informed investment decision.
3. Do not sign up for something you do not understand.
4. Before investing, understand the Terms and Conditions required to redeem, or exit the investment. Understand the Terms and Conditions for Retail Investors RECEPTION Ke a leboga ngwanaka. I am now confident that I will make a good investment decision Mme Mmamotse, we have a range of medium-term investment products. The prospectus discloses all costs associated with investment of your choice including administration costs, expected return on investments as well as T’s and C’s for redeeming or existing investments. You are most welcome Mme Motse. If you need any further clarity, you may reach us on the contact details provided. We’re also able to assist you online to maintain social distancing during the times of social distancing. Before taking any investment product ensure that the entity is licensed with NBFIRA, you know the Ts and Cs of the product you are to take, and the return on investment. LICENSE aaaa Dumela Mme, ke bidiwa Babedi and I will be your investment adviser. I will take you through the investments products we offer and their Terms and Conditions. This way you will be able to make informed decisions that will suite your investment needs. Ke bidiwa Mma Motse. I am a retiree and I am interested in finding out about the investments products on offer. I am delighted to also see that you are licensed with NBFIRA. Am i in the right place?

8 e-Newsletter May 2025 NBFIRA.. Working Towards Financial Stability” Brochure (Front and back cover) Below is an example of a brochure. The NBFIRA Icon, Value Statement, photography and Tahoma work together to form the style of the leaet. The ‘Swoosh’ graphic that is placed horizontally across the middle of the cover is a montage of content specic imagery relevant to the content of the brochure. The use of professional photographs and/or photographic libraryshots are strongly advised throughout the leaet. A guide to photographic style and content is in located in these guidelines. The back page is always white with the NBFIRA Icon, Value Statement and contact details in the bottom left hand corner. Matt Lamination should be applied to the outside front and back cover and Gloss UV varnishing should be applied as shown below. Brochure - Single pages Single pages are used to break up the text pages. This is to create an interesting and visually appealing layout. Single pages can be either full-out photographs or a textpage with out-quotes and smaller photographs. Where possible, photography for the large pages should be either professionally taken or Stock Photo Library Images. When photographs have not been taken professionally they should be kept small and within the grid as shown below. Photocaptions should only accompany photographs within this grid. DL Leaet fold guide LENDING ACTIVITIES CAPITAL MARKETS NBFIRA Ethics Hotline Regulatory Authority? Be part of the solution and make an anonymous report to: 16133 Email to: Website: www.tipoffs.com Postal address: For more information, contact us on: Private Bag 00314, Gaborone Physical Address: 3rd Floor Exponential Matante Road, Gaborone Tel: Fax: +267 3102376/3102353 Email: Website: NBFIRA “NBFIRA… Working Towards Financial Stability” 58 of 116