The increasing rate of youth unemployment in Botswana is having a significant impact on the financial services sector, according to BHIL Group Chief Executive Officer Catherine Lesetedi. Speaking during the company’s end-of-year financial results announcement, Lesetedi revealed that the economic strain caused by unemployment is affecting policy retention rates, as employees supporting larger families struggle to keep up with their financial commitments.
The Ripple Effect of Rising Unemployment
Lesetedi pointed out that as more young people remain unemployed, financial pressure on working family members intensifies. Many employees, who are already juggling personal expenses, are now forced to support extended family members who are unable to find jobs. This additional financial burden has led to an increasing number of policyholders withdrawing from their insurance and investment plans.
“With the rising unemployment, the situation has gotten worse. Many of our clients who previously maintained policies without difficulty are now forced to reconsider their financial priorities,” Lesetedi explained. She noted that this trend is affecting policy renewal rates, which in turn impacts the company’s overall performance.
Financial Struggles and Policy Cancellations
Insurance and financial investment products often require long-term financial commitment, but with more people facing economic hardship, policyholders are increasingly prioritizing immediate needs over long-term financial security. BHIL Group, as a leading financial services provider, has seen a decline in retention rates as individuals and families make tough financial decisions.
Lesetedi emphasized that while financial education plays a crucial role in encouraging people to stay committed to their policies, economic realities often override these efforts. “People understand the value of financial planning, but when faced with urgent financial obligations, they are forced to make difficult choices, often at the expense of their future financial security,” she said.
The Need for Economic Solutions
The CEO stressed the importance of addressing youth unemployment as a national priority, as its impact extends beyond just job seekers. A strong employment market ensures that more people are financially independent, easing the burden on working individuals and enabling them to invest in long-term financial products.
Lesetedi called for collaborative efforts between the private sector and the government to create more employment opportunities for young people. She highlighted that initiatives such as skills development programs, entrepreneurship funding, and job creation strategies could help mitigate the impact of unemployment on families and businesses alike.
Looking Ahead
Despite the challenges, BHIL Group remains committed to supporting its clients through flexible financial solutions. Lesetedi assured stakeholders that the company continues to explore ways to adapt to the changing economic environment, including offering tailored products that accommodate those facing financial strain.
As Botswana grapples with rising unemployment, the effects are being felt across various industries, including financial services. The call for urgent action to create more job opportunities is not only about economic growth but also about ensuring financial stability for individuals, families, and businesses alike.
