Barclays Bank of Botswana, the biggest commercial bank in the country, signed a landmark agreement with the fledgling Local Enterprise Authority (LEA) with the aim of filling-up funding gaps for small and medium enterprises.
“We have realized that we need strategic partners to help us, and we are so glad to have Barclays Bank coming on board in an attempt to help us close the access gap in funding,” LEA Chief Executive Officer, Tebogo Matome, said.
LEA was established by the government last year with the aim of helping the country to develop a crop of sound entrepreneurs and to assist the SMMEs to graduate to a higher level.
So far, the organization has set itself an ambitious plan of opening offices across the country as an effort to be closer to the end users who are spread across the country. The recent memorandum of understanding with Barclays Bank is the first such kind of arrangement with a commercial bank. The organization has an almost similar arrangement with the Citizen Economic Development Agency, which is the government’s private equity fund created to assist citizens climb business’s world ladder.
Matome said the intentions of LEA, formed as an implementing agency for the SMME Policy, are to improve the Ministry of Trade and Industry’s service delivery programmes.
“We are going to make sure that this MoU serves the purpose for which it has been signed. It is LEA’s hope that we work together with Barclays Bank and develop the mutual beneficial relationship. We are eager to see it getting into operation,” he said.
Thuli Johnson, chief executive officer of Barclays Bank, pointed out that his bank is committed to the MoU and takes it seriously.
“SMMEs are areas of our interest,” Johnson said.
The move has shifted the commercial banks’ competition stakes as Standard Chartered Bank is also mulling the same plan. Recently, at the launch of its “smart credit” campaign, it said it is interested in working out MoU with LEA to help in the financing of the SMMEs.
“We see LEA as an opportunity and a platform we can use to grow and support SMMEs. We have realized that there is a need to broaden the SMMEs’ base. There is also a need for communication setup, in addition to setting up the right structures,” Johnson said.