Botswana Export Credit Insurance (BECI) has rolled out a P1 billion loan guarantee scheme as part of the COVID-19 government fiscal policy measures.
It said the framework for the operationalisation of the COVID-19 loan guarantee scheme has been finalised.
“Submissions of applications by the qualifying business entities to their respective banks shall has opened on Tuesday,” BECI said in a statement.
The aim of the scheme is to encourage lending to qualifying businesses by offering a partial government guarantee of 80% to commercial banks and banks established by Botswana legislation. The banks shall retain the remainder of 20% risk of the financial facility.
BECI revealed applications for guarantees by banking institutions shall be received until November 30, 2020. The scheme guidelines can be accessed through the Ministry of finance and Economic Development and BECI.
Meanwhile, BECI has also rolled out the medium and long-term credit insurance. Just like the short-term export credit insurance, the medium and long-term credit insurance covers consist of both commercial and political risks.
Short-term risks are generally those where the credit terms are less than two years. Medium term risks are those between two and five years while long-term risks are in
In August last year, BECI initiated the process of offering medium and long-term credit insurance and outward investment insurance through the engagement of consultants. To date, they have paid claims annually amounting to P22 million since inception and covered transactions up to P5 million.
BECI has also signed a Memorandum of Understanding (MoU) with Botswana Investment and Trade Centre with the aim to strengthen export development and promotion as well as develop reciprocal cooperation between the two entities. The MoU was to strengthen institutional relations and capacity building through mutual cooperation. Equally, it was also focused on supporting small and medium enterprises to export their products as well as assist by providing solutions to their funding problems.
BECI mainly deals with businesses to facilitate trade, but not individuals. It also provides guarantees to some banks when they have extended credit facilities to certain businesses.