Stanbic Bank Botswana has launched its Trans-regional Banking service, positioning itself as an ideal and viable alternative source of funding to businesses expanding beyond the borders of Botswana.
The new product termed ÔÇô ‘business without limits’ – allows businesses to choose between obtaining funds through a bank a loan, known as debt financing, or pooling contributions from investors through the stock market referred to as equity financing.
These two options of financing were a subject of discussion at the recent BSE listings conference, where a discussant Mandy Ramsden, Director of South African based Questco Corporate Advisory eloquently summed that “you’re always going to have a boss, one is called a shareholder and one is a bank.”
With specific regard to debt financing, equity financing expert Anthony Siwawa, Managing Director of Venture Partners Botswana Group which is a Private Equity Fund Manager, advised that businesses should access debt “as long as it is supported by cash flow in the company.” The findings from a local economic think tank – Econsult – prove that the Trans-regional banking offering by Stanbic is relevant to businesses in Botswana.
In its 2015 third quarter (Q3) economic review, Econsult compiled a list of companies in Botswana which have established regional operations. The review cites that 13 of the 22 companies listed on the local bourse have a regional presence, with almost all of them originating from Botswana and as such use the local environment as the primary hub for their regional operations. “The business environment in Botswana enables the firms to have access additional capital from various sources, whether from the banks, the BSE or regional sources,” highlights the review. The list of companies includes amongst others Letshego, Choppies, Turnstar and BIHL.
The review notes that though different, the businesses possess similar characteristics particularly strong balance sheets with retained profits from existing Botswana operations which gives them the requisite capital base to finance expansion. This existing cross-border trend suggests that the Trans-regional Banking could assist businesses to thrust their footprint across the continent.
Proving the relevance of this offering Head of Commercial Banking at Stanbic Bank Chiko Manokore pointed out that there exists traditional barriers for businesses in terms of banking outside the country. He also banks sometimes do not receive the best suited support for their operations because they do not carefully consider the ideal choice of bank.
Manokore asserted that the bank’s new offering can assist to facilitate growth of local businesses through connecting businesses to larger markets and opportunities. He also urged businesses to utilise the new product as it helps businesses to establish banking relationships across Africa, using Botswana as a base to open accounts.
Manokore highlighted that, through its parent bank, Standard Chartered, Stanbic has access to the continent through its footprint in 20 out of the 54 African countries. He added that the bank possesses 153 years of banking experience which local businesses can leverage on for expansion.