USA partner Barclays to avail P132m for SMEs
Pauline Dikuelo | Thursday July 10, 2014 16:11
The credit risk-sharing programme will apply to a portfolio of loans that Barclays Bank makes in the SME sector, worth $15 million (P132 million) for a period of seven years.
“About 10% of this loan portfolio will target the large scale programmes in the health sector which will cover loans up to $500,000 USD for SME`s and up to $2.5 million for health firms with a tenure of six months to five years,” the USA Charge of Affairs, Michael Murphy noted.
He further said that this $15million has the power to catapult Botswana’s under capitalised and fledging SME`s into a dynamic sector of the economy noting that the capital injection came at the right time as Botswana currently needs to diversify away from the mineral based economy whose lifespan is left with a few years.
“There are SME`s in Botswana that have good ideas, good leadership and good teams that are looking to fill important roles in Botswana’s economy. Many of these are looking to expand and some do not exist yet but have attributes that argue in their favour in establishing strong successful businesses. But virtually all of them have a similar problem, lack of finance” he added.
Organisations like Technoserv, The Business Place, the Masire foundation and Women In Business Association (WIBA) are expected to assist and act as a critical complement to existing programmes to advise clients about this programme and provide pre-loan and post loan assistance.
“Through this programme we have enlisted Barclays Bank as a key partner to help catalyse economic growth and we are confident that they will prove able participants in Botswana `s economic future”.
On her part the Chief Executive Officer Barclays Bank of Botswana Reinnette van der Merwe encouraged most SME`s to participate in this regard as their SME programme caters for the companies that make a turnover of 0% to P25 million.
The agreement is expected to unlock critical resources that will help spur innovation, foster investment and provide critical resources to one of the most under-served segments of Botswana’s economy.
The signing of this agreement reaffirms the US`s commitment to Botswana`s economic development and diversification. This agreement comes on the heels of a package of programmes that the US has recently implemented in an effort to bolster Botswana`s economy, including the signing of a bi-lateral air service agreement and a comprehensive training programme to bolster the capacity of government officials in charge of infrastructure projects.
DCA to date has mobilised up to $3.1 billion USD in private, local funds to finance development worldwide. The work with financial institutions to mobilise local financing in developing countries can be extended to underserved borrowers in new sectors and regions.