Friday, September 30, 2022

Stanbic Bank targets SME, agric financing

Stanbic Bank Botswana, the unlisted local finance house, said it will be introducing products in a couple of months that are geared towards government calls to help diversify the economy.

The bank’s Managing Director, Leina Gabaraane, said on Friday they have identified sectors that make a change and support local businesses, including funding SMEs and proving loans for agri businesses.

“We have identified sectors that can help diversify the economy,” Gabaraane said.

Stanbic said it is moving into the SME funding because the sector is an economic driver while helping farmers with agricultural business loans although its risk could be higher than other forms of financing, including corporate funding.

Gabaraane admitted that there could be risks in financing these sectors, but said the risk is spread across any business they finance.

The current dominant financiers to small business and agriculture are Citizen Entrepreneurial Development Agency (CEDA) and National Development (NDB), which are underpinned by government.

CEDA has in the past been blamed for crowding out the private sector as millions of Pula ended up uncollected as bad debt.

“What we are going to do is to try and understand the company that we are dealing with. The SME funding, if we do not do it, who is going to do it?” Gabaraane said.

Stanbic, which is celebrating 20 years as a market player in Botswana, has also played a part in new sectors to the country, including the diamond beneficiation where they have funded players in the industry.

The bank also participates in the P1.2 billion debt facility for Morupule B project through its Investment Banking Division (IBD)

“We (always) participate in sectors that are new; when government decided to bring polishing factories to the country, we were one of the first banks that participated in the sector,” the MD added.

Stanbic was also an arranger for Botswana Housing Corporation (BHC) bond whose proceeds were used to finance the construction of the corporation in up market Phakalane.

The bank has in the past also received awards like the Local Currency Markets Deal of the Year by Credit Magazine 2008 for the P5 billion Domestic Note Programme.

It has also been recognised for being the Most Innovative Bond Deal in EMEA for the Botswana bond programme.

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