Absa Bank Botswana Managing Director KeabetswePheko-Moshagane has called on commercial banks to take a leading role in financing rural industrialisation and supporting cooperatives, arguing that tighter government finances make greater private-sector participation essential to Botswana’s economic transformation.
Speaking at the Bobirwa District Council Rural Development (Industrialisation) Summit in Mmadinare, Pheko-Moshagane said commercial banks have an opportunity to become key development partners by unlocking capital for productive sectors and underserved rural communities.
She said Botswana’s constrained fiscal environment has reduced government’s capacity to finance development projects directly, making it necessary for commercial banks to help fund productive economic activity, particularly in rural areas where limited access to finance continues to hamper business growth.
“The private sector, especially commercial banks such as Absa, must now play a far more catalytic role in inclusive economic development,” she said.
Pheko-Moshagane described rural industrialisation as an economic imperative rather than simply a government ambition, saying it is central to Botswana’s long-term resilience and efforts to diversify the economy beyond mining.
She said Absa Bank Botswana is already supporting this agenda by financing agricultural value chains, agro-processing, livestock enterprises and rural small and medium-sized businesses through lending facilities designed around production cycles and cash-flow realities.
The bank is also financing decentralised industrialisationby supporting small-scale processing plants, storage facilities, cold-chain infrastructure and renewable energy projects that enable production closer to rural communities.
“This approach contributes to building localised industrial hubs instead of waiting for large-scale, capital-intensive industrialisation concentrated in urban centres,” she said.
Beyond lending, Pheko-Moshagane said Absa is working to make rural businesses more bankable by developing financing structures tailored to the realities of rural enterprises while reducing lending risks through partnerships with government and development finance institutions.
These include credit guarantees, risk-sharing mechanisms and value-chain financing anchored by credible off-takers, which help unlock private-sector capital. She added that the bank’s ecosystem banking model enables suppliers to large corporations to access financing using confirmed purchase orders rather than relying solely on audited financial statements.
Pheko-Moshagane identified cooperatives as one of Botswana’s most effective vehicles for inclusive economic participation, particularly in rural communities, saying they strengthen producers’ bargaining power, improve market access and create pathways into the formal economy.
However, she said many cooperatives continue to struggle with weak governance, inadequate collateral, informal operating structures and limited access to formal finance.
To address these challenges, she urged commercial banks to develop lending models that place greater emphasis on business cash flow than collateral while expanding group lending structures.
“At Absa, we have perfected this through our motshelolending proposition and continue to leverage this experience to design innovative financial products,” she said.
She also called on financial institutions to incorporate financial literacy and business development support into their lending strategies to improve governance, bookkeeping, tax compliance and overall business management among entrepreneurs and cooperative members.
According to Pheko-Moshagane, Absa works with government and non-governmental organisations through its employee volunteering programme to strengthen financial literacy among customers, particularly small and medium-sized enterprises.
“We do not view this as social spending but as risk reduction because stronger business capacity directly translates into better credit performance,” she said.
She further highlighted digital financial inclusion as a critical driver of rural development, noting that digital platforms reduce transaction costs, improve transparency and expand access to banking services.
She cited products such as Spark by Absa, a digital wallet that enables customers to access banking services without a conventional bank account, and Mobitab, which allows small businesses to accept digital payments while building a verifiable financial record.
Pheko-Moshagane stressed that access to finance alone would not deliver sustainable rural industrialisation unless cooperatives and rural enterprises are connected to retail markets, institutional buyers and export opportunities.
While commercial banks have an increasingly important developmental role, she cautioned that rural and cooperative lending must remain commercially sustainable.
“The opportunity lies in better structuring, stronger partnerships and effective risk-sharing mechanisms. When designed correctly, impact and profitability are not in conflict—they are mutually reinforcing,” she said.
She concluded by calling for closer collaboration between commercial banks, government, development finance institutions, cooperatives and the private sector to expand rural financing and ensure productive sectors have access to the capital needed to drive long-term economic growth.
