BECI and Stanbic Bank pact to create positive business impact offering cutting edge Bancassurance

BECI General Manger, Cowell Habana

By Henry David

The signing of a Memorandum of Understanding (MoU) between Export Credit Insurance & Guarantee Company Botswana, trading as BECI and Stanbic Bank Botswana is a collaborative milestone anticipated to culminate in a positive impact on the Botswana business landscape. The pact was inked by BECI General Manager Cowell Habana and his counterpart, Stanbic Bank Botswana Head, Wholesale Clients Segment, Sheperd Aisam.

Habana said the collaboration will draw on the strength and capacities of the two entities to provide sustainable stakeholder interventions.

“At BECI, stakeholder collaboration is key and it’s one of the strategic objectives of the entity. In this particular instance, I would like to highlight that Bancassurance, where Banks and Insurance companies work together, is an important initiative towards collaborations and takes advantages of our strengths and capabilities. The collaboration spreads risk across BECI and Stanbic and increases capacities so we can service our stakeholders better,”said Habana.

Habana urged the business community to fully utilise the opportunities availed by the collaboration noting that it will remain a piece of paper in the absence of effort to make it a success.

“I implore our business people to take advantage of these synergies and grow their business accordingly. I urge promoters to use this collaboration to leapfrog into new markets and play a meaningful role, especially in the continent and take advantage of the intents of African Continental Free Trade Area (AfCFTA),” said Habana, adding, “It is the collaborative efforts and initiatives that we shall implement together that will make it a reality, which has a positive impact on the economy of Botswana and help to create a better future for everyone. I wish to indicate that the MOU shall be underpinned by deliverables, and SMART targets shall be set so that we can work towards attaining the purpose of the MOU. We shall have a monitoring and evaluation mechanism in place as we would like to create real opportunities for our value chains with this MOU.”

In his remarks, Sheperd Aisam said Stanbic Bank Botswana believes that the success and dreams of its business clientele need not wholly be deferred when there is ample opportunity to work together to make these dreams a reality. “This is what has led to our strategic partnership with BECI, which is aimed at collectively driving Botswana’s growth. To date, they have supported credit transactions amounting to P12.3 billion, a testament to their resolve in driving the growth of our economy,” said Aisam.

He said Stanbic Bank takes pride in its ability to offer solutions that help clients through their growth journeys and supporting them take unchartered paths. “Through our partnership with BECI, these paths will certainly lead to Botswana’s economic growth and fuel the success of our local entrepreneurs. We do this as part of our unwavering commitment to our purpose, Botswana is our home and we drive her growth. This continues to be a key component in our collaborative efforts to improve lives and uplift the communities we serve. We understand that by working together, we can find new ways to make dreams possible for our people, our

Through our partnership with BECI, these paths will certainly lead to Botswana’s economic growth and fuel the success of our local entrepreneurs. - Aisam

Stanbic Bank Botswana Head, Wholesale Clients Segment, Sheperd Aisam

Stanbic Bank Botswana Head of Transactional Products and Services, Kabo Molimi We understand our responsibility to extend ourselves beyond just banking by adding value through providing exposure, information and our expertise to our clients. -Molimi

customers and our communities. Today marks the first step we take together along what we are confident will be a prosperous journey to creating a lasting legacy,” elucidated Aisam. Unveiling the pact, Stanbic Bank Botswana Head of Transactional Products and Services, Kabo Molimi said the benefits of the partnership includes, joint seminars for SMME’s focusing on export development, guarantee cover/ facilities credit insurance/ insurance cover on bank debt, enhanced product offering through credit insurance, opportunity to connect companies supporting importation/exportation of goods and services into and outside Botswana, provision of back-to-back guarantees in order to support banking facilities, credit insurance to cover bank debt, create access to the Accelerate for sustainable entrepreneurial development processes and as a shared working space, provides transactional and digital banking solutions designed for SMMEs, Business Banking and Wholesale Banking Clients and ease of doing business with China through the Africa China Banking proposition. “We understand our responsibility to extend ourselves beyond just banking by adding value through providing exposure, information and our expertise to our clients. We do this, to foster an environment that facilitates their growth and success. We are a business that values the importance of collaboration and partnership as a driving force to promulgate change and progress. This is but one example of that in action. It is an example of what can happen when two parties come together to ideate, act, and commit to solving for common challenging and with a view towards delivering real solutions,” said Molimi.

COVID-19 Loan Guarantee Scheme

From May 2020, BECI has been administering a P1 Billion COVID-19 Loan Guarantee Scheme which was unveiled by the Botswana government through the Ministry of Finance and Economic Development. According to BECI Sales and Marketing Manager, Rocky Ramalefo, the scheme is part of government’s economic response to the COVID-19 pandemic. “According to the guidelines from the Ministry of Finance and Economic Development who are the custodian of the scheme, The purpose of the Scheme is to provide eligible businesses affected by the COVID-19 pandemic access to credit from banks established by Botswana legislation and commercial banks licensed in terms of the Banking Act (“Banks”) to support ongoing business operations. The Scheme is to encourage lending to qualifying businesses by offering a partial Government guarantee of 80% to Banks against losses on qualifying loans to eligible applicants. The Banks shall retain the remainder of 20% risk of the financed facility,” said Ramalefo. He said the financing under the scheme is to cover for working capital, operations and administrative expenses so as to stabilise operations that were adversely affected by the COVID-19 pandemic. However, items of capital nature are not supported by the scheme.

He noted that the facility which attracts an interest of prime plus 0.5% to 0.75% and subject to a maximum

term of 4 years or 48 months is not a substitute for conventional lending that would otherwise have been taken by the participating banks. “In line with the set guidelines, the banks shall approve qualifying applicants in accordance with their standard internal processes and credit risk policies. Interested companies must apply for the finance facility with their respective banks. It is the banks that will in turn apply to BECI for the approved finance facility to be guaranteed by the Scheme. The banks will undertake full loan recovery process against defaulting borrowers and provide evidence of such process before calling on a guarantee,” said Ramalefo. On eligibility, Ramalefo indicated that all business sectors are eligible for the subsidy with the exception of businesses with direct Government shareholding and Government aided entities, non-governmental organisations as well as Parastatal Companies. “The guideline demands that the business must be tax compliant, duly registered with the Companies and Intellectual Property Authority (CIPA), have been operating and bankable for at least a year prior to 03 April 2020, demonstrate how COVID-19 has disrupted their business, and provide a sustainable business model,” explained Ramalefo, adding, “ The maximum facility to be granted for any one beneficiary shall be P25 million, subject to the following qualifying credit criteria: Loans from P0-2 million - turnover of up to P5 million in the last 12 months prior to 03 April 2020; Maximum of P5 million - turnover of up to P10 million in the last 12 months prior to 03 April 2020; Maximum of P10 million - turnover of up P25 million in the last 12 months prior to 03 April 2020;and Maximum of P25 million - turnover of P50 million up to P100 million in the last 12 months prior to 03 April 2020.” Ramalefo said BECI has under the scheme guaranteed P80 Million while the participating banks have guaranteed a combined P20 Million making a total of P100 Million or ten percent of the P1 billion available in the scheme.

In his analysis, Ramalefo notes that the Botswana COVID-19 Loan Guarantee scheme performance has been at par with similar schemes in the Southern African region which have seen an average uptake of ten percent. In addition to the participating banks and Ministry of Finance and Economic Development, BECI has also been working with The Bankers Association of Botswana (BAB). The COVID-19 Guarantee Scheme is still accessible to businesses until 2022.

BECI Sales and Marketing Manager, Rocky Ramalefo

In line with the set guidelines, the banks shall approve qualifying applicants in accordance with their standard internal processes and credit risk policies. Interested companies must apply for the finance facility with their respective banks. - Ramalefo