BancABC secures Eurobank millions for local companies

Keikantse Lesemela | Wednesday December 3, 2014 11:20

Pim Van Balleckom, European Investment Bank vice President and BancABC MD, Jitto Kurian during the signing of the multi- million Pula deal in Gaborone. PIC KEBOFHE MATHE

The money will be used as loans that will finance the banks’ corporate banking and SME operations.

Speaking during the signing ceremony yesterday, BancABC managing director, Jito Kurian said the loans are meant to assist businesses to expand their operations.

“The loans will be used to finance BancABC’s corporate banking and SME operations, providing capital investment for private businesses particularly medium size corporates and SMEs,” he said.

The loans are split into two components. The first 20 million Euros would be used for financing corporate banking activities while the remaining five is for SME.

Both corporate banking and SME will have access to the funds to on-lend to their existing and new customers in Euro, Dollars or Pula.

Kurian explained that the deal would go a long way in catalysing business activity and the private sector will subsequently make a significant contribution to the economy.

“The loan is meant for mid-size corporates and SME’s to access medium-term funding, mainly for the purchase of capital goods.

Borrowers will have the opportunity to repay the loan over a maximum period of seven years,” he said.

Loans to corporates will be repaid in seven years. The SME loans repayment period is seven to eight years depending on the currency.

The SMEs will be given a two-year grace period on capital repayment.

Kurian said the bank will not be drawing down the loan in one block from EIB.

Instead, the funds will only be drawn on a needs basis once customers’ financing requirements have been approved by BancABC.

“This would mean that the customer would have been vetted by the bank and the bank would have taken the customer’s financing request through its internal credit approval process first,” Kurian explained.

EIB vice president, Pim van Ballekom said the new lending programme with BancABC would unlock business opportunities for companies in Botswana.

“This reflects our shared goals of ensuring that companies involved in a broad range of sectors and operating across Botswana can access finance to investment in expanded operations, build new facilities and create jobs,” he said.

He said because Botswana has been facing a challenge of low production and dwindling exports, the deal will help unlock opportunities for local companies to develop their products and expand to markets outside the country.

“This is the EIB’s first operation in Botswana for many years and we look forward to supporting further engagement in the country.

We are helping the private sector to develop enterprises and create employment,” said Ballekom.