Botswana: lending & credit regulation

Who regulates

• Non-Bank Financial Institutions Regulatory Authority (NBFIRA)

  Primary supervisor for non-bank lenders, micro-lenders, pawnshops, and finance/leasing companies.

  ^{[1][2][3][4][5][6]}

• Bank of Botswana (BoB)

  Primary supervisor for commercial banks and statutory banks.

  ^{[7][8][9][10][11]}

Core laws & rules

• Banking Act 2023 (2023)

  Establishes the comprehensive licensing framework and prudential standards for banking institutions in Botswana.

  ^[7]

• NBFIRA Act (Unknown)

  Grants NBFIRA statutory powers to regulate non-bank financial institutions, including the authority to issue directives on repayment schedules and consumer protection.

  ^[4]

• Credit Information Act (2021)

  Mandates non-bank lenders to submit prescribed consumer credit data to licensed credit bureaus.

  ^[1]

Licensing & registration

• Banking License

  Required for all banking institutions operating in Botswana under the Banking Act 2023. Capital: P20 million

  ^[7]

• Non-Bank Lender License

  Required for micro-lenders, pawnshops, finance companies, and leasing companies supervised by NBFIRA.

  Low confidence — verify with the regulator before relying on this.

Restrictions & warnings

• Non-bank micro-lenders must cap early settlement fees at thirty calendar days' interest on the outstanding principal, applicable only if borrowers waive a written notice period.

  ^[6]

• Pawnshops, finance, and leasing companies must waive early settlement fees if borrowers provide written notice at least 30 days before payoff; otherwise, fees are capped at 60 days' interest.

• Banks are capped from levying more than 30 days' interest as an early repayment penalty for term loans, with a mandatory 45-calendar-day written notice period.

  ^[10]

• All non-bank lenders must issue standardized repayment schedules disclosing principal, interest rates, and total cost of credit prior to loan agreement execution.

  ^[3][5]

• Banks must adhere to large exposure limits and robust credit policies as mandated by BoB guidelines.

  ^[11]

Direction of travel

• Regulators are actively enforcing consumer protection measures, particularly regarding transparency in repayment schedules and caps on early settlement fees for non-bank lenders.

  ^[4][2]

• Integration of non-bank lenders into the formal credit information system is a current priority under the Credit Information Act 2021.

  ^[1]

Sources

1. Non-Bank Lenders Circular – Credit Information Act · 2025-06-12
2. Early Settlement Guidance Note for Micro Lenders · 2025-01-25
3. Repayment Schedule Directive for Pawnshops, Finance and Leasing Companies · 2025-01-21
4. NBFIRA Directive on Issuing Repayment Schedules to Borrowers · 2025-01-21
5. NBFIRA Repayment Schedule Directive for Micro Lenders · 2025-01-21
6. Early Settlement Guidance Note for Micro Lenders · 2025-01-21
7. Banking Regulations 2025 · 2025-01-01
8. Circular on Regulatory Treatment of Accounting Provisions – Interim Approach and Transitional Arrangement · 2021-08-24
9. Circular to Banks on Guidance on the Regulatory Treatment of IFRS 9 in the Context of COVID-19 · 2020-03-31
10. Prescription of Notice Period and Early Settlement Penalties for Term Loans and Similar Credit Facilities · 2011-01-01
11. Guideline on Large Exposures · 2010-06-04