Botswana's Non-Bank Financial Institutions Regulatory Authority and Financial Intelligence Agency warn micro-lenders about fraudulent loan applications

Botswana's Non-Bank Financial Institutions Regulatory Authority (NBFIRA) and the Financial Intelligence Agency (FIA) issued a joint public notice warning of a growing trend of fraudulent loan applications, with micro-lending institutions identified as a key target. The notice urges financial institutions to strengthen loan application processes and controls, and calls on the public to report suspected fraud. The authorities highlighted common methods including impersonation using counterfeit or altered national identity documents, falsified proof of income such as forged payslips, employment letters or bank statements, and collusion involving bribed employees within lending institutions. Recommended measures include verifying national identity numbers and employment records with issuing authorities and employers, improving document authentication using secure systems to detect forged or altered documents, training and refresher training for staff on fraud red flags, and promptly reporting fraud incidents to the Botswana Police Service and suspicious transactions to the FIA in line with the Financial Intelligence Act. The notice also states that loan fraud is a criminal offence and a predicate offence for money laundering under Botswana law.