Botswana’s Banks Face Funding Squeeze as Deposits Lag Lending
Botswana’s banking sector is navigating a challenging period. Data from the Bank of Botswana indicates that deposit growth is not keeping pace with the expansion of bank lending. This trend is narrowing the funding pool available to banks, raising concerns about liquidity.
Modest Deposit Growth
Total deposits reached approximately P110.8 billion by the end of September 2025. This marks an increase from P107.3 billion in January of the same year, representing a growth of roughly 3.3 percent, or P3.5 billion.
Comparing year-on-year figures, deposits grew from P108.9 billion in September 2024 to P110.8 billion in September 2025. This shows a more modest increase of about 1.8 percent.
Lending Outpaces Deposits
While deposits have shown some growth, bank credit has expanded at a significantly faster rate. Lending increased by approximately 8.5 percent over the same period.
This disparity has pushed the loan-to-deposit ratio to around 82 percent. The widening gap between deposit growth and lending activity intensifies concerns about the availability of liquidity for banks within the current economic climate.
Summary: Botswana’s banks are facing a funding squeeze as deposit growth lags behind lending expansion. With deposits increasing modestly and credit growing substantially, the loan-to-deposit ratio has climbed, raising liquidity concerns for the sector amid weak economic momentum.
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