Botswana has taken a big step towards setting up its first indigenous commercial bank after the Botswana Building Society (BBS) announced on Friday that 99.97% of its shareholders had approved a resolution to demutualise the 41-year-old society, allowing it to convert into a commercial bank.
Demutualisation is the process in which a mutually or co-operative owned body becomes a limited company by converting the interests of the members into shareholdings.
BBS Managing Director Pius Molefe announced the move on Friday and said they would apply for a banking licence in December 2017. He went on to say that the application process would take about six months to be evaluated and BBS hopes to start operating as a commercial bank in the first quarter of 2019.
The development of Botswana’s first home-grown commercial bank will add a new dynamic to the country’s industry that the International Monetary Fund (IMF) says is already crowded.
Currently, there are around 10 commercial banks in Botswana, all of which are foreign owned. However, as reported on Reuters, the IMF has stated that there is room for further consolidation in the country’s sector. ($1 = 10.2249 pulas)
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