Why It Matters, Who It Covers, and What It Means

By Tsaone Kabomo

In our previous blog article, we unpacked what it means to be a licensed credit bureau. Today, we take a closer look at the actual regulation—the Credit Information Act, 2021. Please note this is written from the perspective of a Credit bureau operator, not as a legal review.

Why the Credit Information Act Matters; Objectives of the Act

This Act governs how credit information is collected, processed, and shared in Botswana. But what does it mean for consumers, lenders, and the financial system? The Credit Information Act was designed to:

• Promote a fair and efficient credit reporting system by ensuring that credit data is collected and shared responsibly.
• Safeguard consumer rights by requiring consent, accuracy, and transparency in how personal and business financial information is handled.
• Enable risk-based lending, helping credit providers make informed decisions while reducing over-indebtedness and defaults.
• Regulate and supervise credit bureaus, to ensure integrity, professionalism, and accountability in credit reporting.
• Ultimately, the Act supports financial inclusion, consumer protection, and economic resilience.

Who the Act Affects:  Section 3 of the Act states its broad application including;

• Credit bureaus: Companies licensed to collect, compile and distribute credit information.
• Data providers: Entities that supply consumer credit data (e.g., banks, microfinance, utility companies, mobile money providers, retail stores offering credit).
• Data users: Anyone who requires credit reports/insights to make decisions (e.g., lenders, employers, landlords).
• Data subjects: Individuals or businesses whose credit information is being collected or shared.
• The Bank of Botswana, which serves as the regulator and supervisor.

In short, the Act touches nearly every part of the credit ecosystem ensuring checks, balances, and protections at every level.

Licensing and Oversight of Credit Bureaus

To operate as a credit bureau in Botswana, a company must obtain a license from the Bank of Botswana; a crucial measure to ensure vetted and accountable institutions handle sensitive credit data. Any company that meets the criteria can be licensed. These include sufficient resources to operate sustainably, knowledge and experience in running Credit bureau operations and Directors and senior management with strong character and relevant experience among others.

Notably, the Act reserves new licenses for majority citizen-owned companies, requiring at least 60% citizen shareholding (Section 7(4)), a progressive move to build local capacity in the financial sector.

Who Is Prohibited from Operating a Credit Bureau? Certain entities cannot apply for or operate a credit bureau, including:

• Banks and development finance institutions regulated under other laws.
• Debt collection agencies.
• Other data providers (e.g., microfinance, leasing firms).

This separation ensures no conflict of interest between data suppliers and those compiling or distributing reports.

Data Accuracy and Security

Both credit providers and credit bureaus must submit only accurate, complete, and up-to-date information. They must keep credit data secure from loss, misuse, and unauthorized access and correct errors promptly if a complaint is lodged on data accuracy. Credit bureaus must operate within the terms of their license and are subject to ongoing supervision by the Bank of Botswana, including audits, inspections, and compliance reporting.

What Happens if a Bureau Violates the Rules?

The Bank of Botswana has powers to:

• Revoke or suspend licences for misconduct or non-compliance.
• Investigate complaints, issue enforcement notices, and publish disciplinary actions in the national press.
• Require the handover of all credit data to the Bank if a bureau’s licence is revoked (Section 15).

Why This Act Is Good for Botswana

Whether you’re a borrower looking to build your financial reputation, a lender managing credit risk, or a policymaker supporting national development, this Act lays a strong foundation.

By regulating how credit data is collected and shared, Botswana is building a fairer, more efficient, and more transparent credit system. It enhances trust, protects rights, and unlocks access to finance for more citizens and businesses.

Be sure to read our next article where we will look into what the law expects from credit providers and credit bureaus, before wrapping up the series with a closer look at consumer rights.