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Local firms scramble for govt’s P1bn loan guarantee scheme

Government’s P1 billion loan guarantee scheme has kicked off at a steady pace with the country’s biggest bank, First National Bank Botswana (FNBB), receiving 37 applications valued at P99 million in the two months since the coronavirus (COVID-19) initiative was established.

FNBB is one of several participating local banks in the initiative, under which government will guarantee 80% of the loan amounts disbursed to qualifying firms. Run by government’s credit insurance agency, Botswana Export Credit Insurance, the scheme offers loans of up to P25 million and government guarantees of up to 24 months in tenure. Applications will be closed on the November 30, 2020. This week, FNBB CEO Steven Bogatsu, said the bank was assessing the applications, which come from a cross section of businesses in the country.

“The bank is assisting all eligible businesses and receiving applications from various sectors including business services, construction, electricity, finance, manufacturing, mining, real estate, trade, travel and tourism as well as water sectors,” he said.

Requirements to access the scheme include that the business must be tax-compliant, duly registered with the Companies and Intellectual Property Authority and have been

operating and bankable at least a year prior to April 3, 2020. Applicants should also demonstrate how COVID-19 has disrupted their businesses and should provide a sustainable business model.

Bogatsu said FNBB has also been providing its own support to its customers in light of the difficult operating circumstances faced as a result of the pandemic.

“The bank assisted customers through the cash flow relief programme (loan payment holiday) to the value of P343 million for retail customers and P1.1 billion for 514 customers in the commercial segment, which was inclusive of SMEs and mid-corporate,” he said.

“The bank will continue to explore other debt and funding structures for its clients to fight COVID-19.” Additionally, Bogatsu said the bank issued a P40 million working capital facility to a local medical equipment supplier, who will supply government with COVID-19 testing kits and lung-function testing machines.




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