Challenges, Opportunities And Options In Savings And Credit Cooperatives Society Schemes As Strategy For Micro-Financing Housing In Botswana

Botswana's housing finance sector has undergone substantial transformations and growth over the past two decades from a relatively small banking sector dominated by commercial banks to ten commercial banks, four investment banks, two state-owned development finance organisations and one building society. The main aim of this research is to investigate available options for raising housing finance for low-income earners in Botswana. The study of this nature is important for the housing finance sector which is mostly represented by the banking sector as the formal system of housing finance, mostly through mortgage finance (Tomlison, 2006). According to (Tomlison, 2006) those that cannot afford a mortgage loan will at least be able to house themselves incrementally through the construction of houses. The study target population constituted the formally registered SACCOS and a sample from Gaborone was drawn for the semi-structured questionnaire which was utilised. The quantitive research approach used descriptive statistics to analyse the findings of this study. The research findings supports the noon that non-bank and informal finance systems provide small loans and small savings for housing finance. The informal systems include group-based savings collections such as Savings and Credit Cooperative Society (SACCOS), Internal Savings and Lending Schemes (ISLES) and microfinance firms that cover a wide range of community needs. ISLES serve economic and social purposes.SACCOS are an extension of Rotang Savings and Credi tAssociaon (ROSCAS). In Botswana, ISLES exist in various names depending with the community they are commonly popular amongst all and are referred to as motshelo, mahodisano in Setswana, and stokvels - membership is by individual periodic payments which can be weekly or monthly payment with an arrangement of peer lending and is different from microcredit but operate almost in the same way. This arrangement provide a safe financial inclusion especially for those in informal employment.