Sunday, March 26, 2023

Stanbic positions itself for DTC relocation, eyes SME funding

Stanbic Bank Botswana warned competitors this week it is stepping up gear into understanding how diamond value chain functions in a bid to strengthen presence in the sector as the country readies to welcome fully DTC Sales and Marketing activities from UK by next year.

The bank also revealed its interest in business banking or funding the SME sector that created large economies like Germany and driving growth in Asia.

The unlisted banking house, which is part of the Standard Bank group, sees diamond trading as the ‘last piece in the puzzle’ as it has been involved in other aspects of chain.

Provided the traders do not bring money in their briefcases, the move presents an opportunity for bankers to reposition themselves for diamond trading that will see over P40 billion worth of diamonds changing hands in Botswana.

“What is happening in the diamond industry is interesting and it is going to change the face of the economy,” Stanbic Bank Managing Director, Leina Gabaraane, said.

“We are looking at ways to participate in that,” he added. Stanbic has participated in the other aspects of diamond mining to beneficiation, but it has been excited by the relocation of DTC International from London to Gaborone, which includes the recent launch of aggregation activity.

Gabaarane whose bank also provides mortgage financing said with the expected 200 families coming to Gaborone, ‘it means there is demand for property and banking services’.

“We are positioning ourselves to be a banker of choice,” he said, adding the task will be to understand the requirements of these families.

Gabaarane added that with a lot of people who used to travel to London to buy diamonds now coming to Gaborone, ‘pressure is in the transmission of funding’.

“We need to position ourselves to all of these opportunities so that we fully leverage on that. We are really excited about these developments,” he added.

Standard Bank Deputy Group Chief Executive, Ben Kruger, added the bank will use sector specialists in the group to see what is relevant in Botswana like power sector in the country.

The banking group is experienced in the Botswana power sector as together with their shareholder, Industrial Commercial Bank of China (ICBC), put together financing for the building of the P11 billion Morupule B Power Project.

Stanbic Bank provided part funding for the 600 MW project and Standard Bank Group’s work project was acknowledged internationally, with the deal being recognised as the “African Power Deal of the Year” by Project Finance International magazine.

Kruger added that the bank is also interested in business banking or SME banking. Stanbic recently introduced SME banking division.

The SME sector is credited for growth in Asian economies and made large economies like Germany.

The launch of the division sent warning bells to National Development Bank (NDB) and Citizen Entrepreneurial Development Agency (CEDA), which have been blamed for being slow in processing loan applications.

Stanbic Bank Small to Medium Enterprise SME Quick Loan targets start up enterprises and funds growing businesses in an economy where small businesses face challenges in accessing funding.

Lack of collateral and tedious application process has led to many small businesses barred from accessing money.

“It is probably one of the riskiest sectors but the reality is that banking is all about managing risk and this therefore means that we will ensure at all times that we are managing the risk as best as we can, ”Gabaraane said at the launch of the SME product.

“Also, we have considered group learning: we have rolled the product in Africa 18 months ago, including Kenya, Tanzania and Nigeria and to date we have less than 3 percent default rate.”

Botswana’s SME sector employs around 300, 000 people and it contributed 42 percent to the GDP in 2010.


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