To expand financial inclusion and improve access to loans for low-income borrowers in Botswana, IFC and Peo Finance Proprietary Limited today announced a partnership to help Peo grow and better tailor its lending, including through a new digital system.
IFC will loan up to $40 million equivalent (about 400 million Botswana Pula) to Peo Finance and provide advisory support to help the company digitize its lending operations and integrate internationally recognized responsible lending practices.
Peo Finance will use the financing to expand its micro lending in Botswana, especially to government employees, to help them access loans for education, agricultural projects, or home improvement activities, among others. This will in turn support economic activity and resilience in Botswana.
Peo Finance is a non-bank financial institution. It is a wholly owned subsidiary of Capricorn Investment Holdings Botswana Limited (CIHB), a Botswana holding company with no commercial activities.
“As a very young organization, we are happy with the assistance that we have received from IFC. Our mandate is not just to finance Batswana but to be an inclusive financier that ensures a trickledown effect in the country’s economy. We want to plant financial seeds which will have a positive impact for many years to come,” said Andre Huenes, Head of Unsecured Lending at Capricorn Investment Holdings Botswana Limited (CIHB).
“IFC’s investment in Peo Finance will help support the growth of the micro lending sector, which is a key enabler of economic growth in Botswana,” said Carlos Katsuya, IFC’s Senior Country Manager for Botswana. “This investment will allow individuals in Botswana, especially government employees, to access financing in a timely manner.”
The funding will also help Peo Finance fully integrate internationally recognized responsible lending practices into its operations and improve client protection, in line with its goal to obtain a Client Protection Pathway certification from a global rating agency.
Micro lenders are highly fragmented in Botswana, home to more than 230 registered institutions, and have limited access to funding from either local or international sources. IFC’s investment in Peo Finance will help the company address liquidity constraints and increase its footprint on the market.
The investment supports resilience in Botswana’s microfinance sector by making financing available to help the market better deal with the uncertainty and economic slowdown caused by the COVID-19 pandemic.
Peo Finance (Pty) Ltd is a micro lending company registered with NBFIRA in November 2021. A sister company to Bank Gaborone, Peo Finance is a member of Capricorn Group and started its operations in December 2021. The micro-lender services over 1700 clients, providing provides personal loans to Central Government Employees and BPOPF Members.
Peo Finance is a fast-growing financial institution with a loan book of more than P150 million. Currently, it has a staff compliment of 12 employees and operates mainly from the Gaborone office. Peo Finance has a wide network of brokers and field agents across the country.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries.
In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.