Batswana borrow for consumption

source: BOPA
20 March, 2008

GABORONE – Some 57.9 per cent of loans acquired by Batswana in 2006 were used to finance education, funerals, travels, marriages and car purchases.

An economics lecturer at the University of Botswana, Dr Nathan Okurut, says this indicated a tendency to borrow for consumption rather than investment.

Dr Okurut warned at the annual National Credit Convention, this week that reckless borrowing could affect the economy by increasing poverty in a nation when potential savings such as pensions and gratuities were used to repay consumption loans.

He said poor credit management could also lead to the collapse of financial institutions and instability of the financial sector, hence the need for prudential regulation of financial institutions.

The convention was organised by Credmark Botswana, which provides innovative solutions in credit and risk management, as well as practical skills to improve cash flow and [continue reading]

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