Botswana’s banks are increasingly generating revenue from digital transactions and other non-interest activities as pressure on traditional lending income intensifies, according to the Bank of Botswana’s Banking Supervision Annual Report 2025.
Non-interest income rose 33.7 percent in 2025 to P5.2 billion, lifting its contribution to total banking income to 43.8 percent from 34.3 percent a year earlier. The increase was driven mainly by higher fee and commission income associated with greater transaction volumes on digital platforms, alongside increased foreign-exchange activity.
The shift comes as net-interest income, traditionally the core earnings engine for banks, moved in the opposite direction. Net-interest income fell 10.4 percent to P6.7 billion, reducing its share of total income to 56.2 percent from 65.7 percent.
The changing income mix points to a banking industry becoming less dependent on interest spreads and more reliant on payments, transactions and other fee-generating services.
Digitalisation is also reshaping the wider payments landscape. The number of electronic payment and money-transfer providers fell to 22 from 24 during the year, while their combined agent network exceeded 2,500. The central bank is also pursuing further m
For banks, the economics of digital banking extend beyond convenience. Higher transaction volumes create opportunities to monetise everyday payments and financial activity, potentially providing an additional income stream when lending margins are under pressure.
The trend is already visible in the sector’s profitability figures. Commercial-bank after-tax profit fell 10.1 percent to P3.7 billion in 2025, despite total income increasing 4.7 percent. The growing contribution of non-interest income therefore represents more than a technology story: it is becoming part of how Botswana’s banks are adapting their revenue models.