Informal financial markets in Botswana: a case study of Gaborone City

Figures & data

Table 1:  

Type of informal institution	Financial services
	Credit only	%	Savings only	%	Both credit and savings	%	Total	%
Moneylenders	29	53.7	0	0.0	0	0.0	29	26.1
Pawnshops	9	16.7	0	0.0	0	0.0	9	8.1
ROSCAS	16	29.6	5	22.7	23	65.7	44	39.6
Savings and credit cooperatives	0	0.0	1	4.5	9	25.7	10	9.0
Community-based organisations	0	0.0	16	72.7	3	8.6	19	17.1
Total	54	100.0	22	100.0	35	100.0	111	100.0
Percentage	48.6		19.8		31.5		100.0
Note: Pearson χ^2(8) = 115.74. Prob = 0.000.

Table 2:  

Type of informal institution	Revolving loan fund	%	Social events	%	Invest group projects	%	Total
ROSCAs	20	90.9	2	9.1	3	42.9	25
Savings and credit cooperatives	2	9.1	1	4.5	4	57.1	7
Community-based organisations	0	0.0	19	86.4	0	0.0	19
Total	22	100.0	22	100.0	7	100.0	51
Percentage	43.1		43.1		13.7		100.0

Table 3:  

Type of informal institution	Age of business
	<1 year	%	1–3 years	%	3–5 years	%	5–10 years	%	> 10 years	%	Total
Moneylenders	10	35.7	7	23.3	4	19.0	5	35.7	3	16.7	29
Pawnshops	2	7.1	4	13.3	1	4.8	2	14.3	0	0.0	9
ROSCAs	14	50.0	17	56.7	10	47.6	2	14.3	1	5.6	44
Savings and credit cooperatives	0	0.0	1	3.3	2	9.5	1	7.1	6	33.3	10
Community-based organisations	2	7.1	1	3.3	4	19.0	4	28.6	8	44.4	17
Total	28	100.0	30	100.0	21	100.0	14	100.0	18	100.0	111
Percentage	25.2		27.0		18.9		12.6		16.2		100.0

Table 4:  

Type of informal institution	Gender of clients
	Males	%	Females	%	Equal representation	%	Total
Moneylenders	5	35.7	11	16.4	13	43.3	29
Pawnshops	3	21.4	1	1.5	5	16.7	9
ROSCAs	2	14.3	35	52.2	7	23.3	44
Savings and credit cooperatives	2	14.3	4	6.0	4	13.3	10
Community-based organisations	2	14.3	16	23.9	1	3.3	19
Total	14	100.0	67	100.0	30	100.0	111
Percentage	12.6		60.4		27.0		100.0

Table 5:  

Type of informal institution	Income bracket
	High	%	Medium	%	Low	%	Total
Moneylenders	0	0.0	21	33.3	8	17.8	29
Pawnshops	1	33.3	4	6.3	4	8.9	9
ROSCAs	2	66.7	27	42.9	15	33.3	44
Savings and credit cooperatives	0	0.0	6	9.5	4	8.9	10
Community-based organisations	0	0.0	5	7.9	14	31.1	19
Total	3	100.0	63	100.0	45	100.0	111
Percentage	2.7		56.8		40.5		100.0

Table 6:  

Type of informal institution	Age of clients/members
	20–30 years	%	30–40 years	%	40–50 years	%	>50 years	%	Total
Moneylenders	1	8.3	24	35.8	4	14.3	0	0.0	29
Pawnshops	2	16.7	7	10.4	0	0.0	0	0.0	9
ROSCAS	8	66.7	25	37.3	10	35.7	1	25.0	44
Savings and credit cooperatives	1	8.3	3	4.5	6	21.4	0	0.0	10
Community-based organisations	0	0.0	8	11.9	8	28.6	3	75.0	19
Total	12	100.0	67	100.0	28	100.0	4	100.0	111
Percentage	10.8		60.4		25.2		3.6		100.0

Table 7:  

Type of informal institution	Prerequisites for clients
	Employed	%	Monthly income	%	Member of community	%	Have asset	%	Relationship with a member	%	Total
Moneylenders	10	58.8	19	35.8	0	0.0	0	0.0	0	0.0	29
Pawnshops	0	0.0	3	5.7	0	0.0	6	100.0	0	0.0	9
ROSCAs	7	41.2	21	39.6	4	80.0	0	0.0	8	88.9	40
Savings and credit cooperatives	0	0.0	8	15.1	0	0.0	0	0.0	1	11.1	9
Community-based organisations	0	0.0	2	3.8	1	20.0	0	0.0	0	0.0	3
Total	17	100.0	53	100.0	5	100.0	6	100.0	9	100.0	90
Percentage	18.9		58.9		5.6		6.7		10.0		100.0

Table 8:  

Type of informal institution	Security type
	Household assets^a	%	Cars	%	Houses	%	ATM cards	%	Guarantors	%	Total
Moneylenders	1	11.1	0	0.0	0	0.0	25	78.1	0	0.0	26
Pawnshops	7	77.8	2	100.0	0	0.0	0	0.0	0	0.0	9
ROSCAs	1	11.1	0	0.0	0	0.0	3	9.4	0	0.0	4
Savings and credit cooperatives	0	0.0	0	0.0	1	100.0	4	12.5	1	100.0	6
Total	9	100.0	2	100.0	1	100.0	32	100.0	1	100.0	45
Percentage	20.0		4.4		2.2		71.1		2.2		100.0
^aThe household durable assets include television sets, music systems and computers.

Table 9:  

Type of informal institution	Repayment rate
	<20%	%	21–40%	%	41–60%	%	61–80%	%	81–100%	%	Total
Moneylenders	3	60.0	2	66.7	3	30.0	1	16.7	20	30.3	29
Pawnshops	0	0.0	0	0.0	4	40.0	0	0.0	5	7.6	9
ROSCAs	0	0.0	1	33.3	3	30.0	4	66.7	32	48.5	40
Savings and credit cooperatives	2	40.0	0	0.0	0	0.0	1	16.7	6	9.1	9
Community-based organisations	0	0.0	0	0.0	0	0.0	0	0.0	3	4.5	3
Total	5	100.0	3	100.0	10	100.0	6	100.0	66	100.0	90
Percentage	5.6		3.3		11.1		6.7		73.3		100.0

Table 10:  

Type of informal institution	Mean loan amount (P)	Mean loan period (months)	Mean interest rate per month (%)
Moneylenders	1375.9	1.2	23.4
Pawnshops	900.0	1.1	25.6
ROSCAS	1362.5	1.2	17.5
Savings and credit cooperatives	1580	1.3	18.3
Community-based organisations	1078.9	1.1	16.7
Overall mean	1299.5	1.2	20.4
F-statistic	1.17	0.57	6.91
Prob>F	0.3272	0.6871	0.0001

Table 11:  

Type of informal institution	Repayment frequency
	Weekly	%	Monthly	%	Total
Moneylenders	0	0.0	29	33.7	29
Pawnshops	0	0.0	9	10.5	9
ROSCAs	0	0.0	37	43.0	37
Savings and credit cooperatives	1	100.0	8	9.3	9
Community-based organisations	0	0.0	3	3.5	3
Total	1	100.0	86	100.0	87
Percentage	1.1		98.9		100.0

Table 12:  

Type of informal institution	Use of loan funds
	Household consumption^a	%	Working capital	%	Pay debts	%	Family emergency^b	%	Total
Moneylenders	13	31.7	2	28.6	3	42.9	11	32.4	29
Pawnshops	3	7.3	0	0.0	2	28.6	4	11.8	9
ROSCAs	20	48.8	3	42.9	2	28.6	14	41.2	39
Savings and credit cooperatives	5	12.2	2	28.6	0	0.0	2	5.9	9
Community-based organisations	0	0.0	0	0.0	0	0.0	3	8.8	3
Total	41	100.0	7	100.0	7	100.0	34	100.0	89
Percentage	46.1		7.9		7.9		38.2		100.0
^aHousehold consumption includes purchase of food and durable assets. ^bFamily emergencies include funeral expenses, treatment in case of sickness and payment of school fees.