Debt in Botswana

Private credit use in Botswana is widespread. In December 2024, total household debt amounted to P68.6 billion and represented 26 percent of gross domestic product. The largest borrowing group was people aged 36 to 49, with around P40 billion; a large share of the credit volume was associated with incomes between P9,000 and P25,000. Men held 56 percent of the recorded credit volume. The data covered nine commercial banks, one statutory bank, ten microlenders and one instalment-purchase group with 61 outlets. Microlenders are supervised by the non-bank financial institutions regulator (Non-Bank Financial Institutions Regulatory Authority (NBFIRA)). On 31 March 2024, 407 supervised non-bank financial companies were recorded, including 282 microlenders, 68 finance companies, 52 pawnshops and three leasing companies. On 31 December 2023, microlenders had 208,713 customers and a loan book of P7.959 billion; six providers held 96 percent of it. Microlenders generally lend to natural persons, often using salary deductions as the repayment method. Before entering into a credit agreement, check the provider in the NBFIRA register or with the relevant banking supervisor. The lender must assess the borrower's ability to pay, identity, financial means, existing obligations and repayment prospects. Unlicensed lending increases legal and financial risk. Providers may not retain identity cards, bank cards, debit cards or credit cards as security. The contract must clearly state the interest rate, fees, term, instalments, security and consequences of late payment. Costs depend on the product and provider. For 2024, the maximum rate was 36 percent for credit-card credit and 25.5 percent for unsecured loans; average interest rates were 17.1 percent for credit cards and 13.5 percent for unsecured loans. Additional charges may include administration, origination, valuation, processing, documentation, collection and insurance fees. Creditworthiness checks, guarantees, security over assets and credit, mortgage or loss-of-income insurance affect total costs and the risk of default. All lenders, including banks, Botswana Savings Bank, National Development Bank, non-bank financial institutions and instalment-purchase providers, must report data to a licensed credit bureau. This process is governed by the credit information law (Credit Information Act 2021) and the 2022 Regulations. Borrowers may request their own credit report, the list of users from the previous six months, and explanations of data sources and scoring codes. After a negative credit decision, the reason must be provided in writing within five days. A credit report should generally be provided within seven days; special deadlines apply for a free copy after an investigation or a negative decision. Incorrect, incomplete or outdated data can be challenged with the credit bureau; the bureau must forward the challenge within five days, investigate within 14 days, and the data provider must respond within 30 days. For arrears, first seek an internal solution with the lender or submit a complaint to the provider. For non-bank financial institutions, an NBFIRA rule on early settlement has applied since 1 July 2024. If the provider does not respond within ten working days or the response is unsatisfactory, a complaint can be submitted to NBFIRA. The non-bank financial institutions tribunal (Non-Bank Financial Institutions Tribunal (NBFIT)) may then be considered where appropriate. For a bank, the route runs from the internal complaints office to the banking ombudsman (Botswana Banking Ombudsman) and then, if necessary, to the banking supervision director (Director of Banking Supervision) at Botswana's central bank (Bank of Botswana). The competition and consumer regulator (Competition and Consumer Authority) can help with unfair business practices and consumer disputes, but it first requires an attempt to resolve the matter directly with the provider and suitable evidence. For a civil claim below P40,000, the magistrates' court (Magistrates Court) generally has jurisdiction. Proceedings begin with a summons and supporting documents; service is carried out personally or by a court enforcement officer (Deputy Sheriff). The court fee is P60 plus the Deputy Sheriff's fee. After a judgment, an enforcement order may lead to the attachment and sale of movable property. Beds, food, clothing and certain work equipment are protected. The sale notice must be published within 14 days; if the proceeds are insufficient, a further attachment may be possible. The official sources consulted do not establish a general government debt-advice service, debt-consolidation scheme or charitable debt-regulation process for Botswana. There is therefore no documented general debt relief on which borrowers can rely. The documented routes are an internal agreement with the lender, complaints to the relevant regulator, court enforcement proceedings and, in cases of severe over-indebtedness, sequestration under the insolvency law (Insolvency Act). The debtor may apply for voluntary sequestration, while creditors may apply for compulsory sequestration; the High Court decides, the insolvency administration office (Master's Office) appoints an estate administrator (curator bonis) or trustee, and then administers assets, income and creditor claims. Processing time and later discharge cannot be guaranteed generally; the relevant Master's Offices are in Gaborone and Francistown. Public debt must be distinguished from private consumer debt. The Ministry of Finance manages public and government-guaranteed liabilities, the debt strategy, securities issuance and debt-sustainability reports. Including guarantees, public debt amounted to P90.03 billion in December 2025, or 33.02 percent of gross domestic product; P55.98 billion was domestic debt and P34.06 billion was external debt. For the 2026/27 financial year, a share of 44.66 percent of gross domestic product was projected, compared with a statutory ceiling of 40 percent. These figures describe public finances and do not automatically describe private household debt.