Banks disburse P100m under COVID recovery scheme
Forty- seven ( 47) local companies mostly from the tourism and agricultural sectors have so far borrowed a total of P100 million from all local commercial banks including National Development Bank under the aegis of Loan Guarantee Scheme. Although the situation is improving, both agriculture and tourism sectors were hard hit during the lockdowns and continue to be affected, with all bookings cancelled and farm proceeds damaged as there was no one to attend to the farms. This means that as per its commitment, the risk which government guarantees is P80 million of the total money that has been disbursed thus far by the banks. Government introduced the scheme in order to assist companies that have been hit hard by the outbreak of COVID- 19 and help them recover. When introducing the initiative and as a way of enticing commercial banks to buy in, government committed to guaranteeing 80 percent of the loans obtained with the banks remaining with just 20 percent. Government also appointed BECI as scheme administrators. The borrowing period was set to end November 2020, but was extended by six months to end of March 2021 as the situation had not improved. But, now the period has been extended by another year to 31st March 2022. Under the scheme, qualifying companies are allowed to borrow up to P25 million payable in two years. The positive thing is that none of the companies are in arrears. Confirming this to Botswana Guardian, BECI general manager, Cowell Habana said the reason for the extension is that at the envisaged closing of applications, it was still evidently clear that COVID- 19 was still affecting the operations of businesses and there were high chances that it may continue for some time. Habana said: “The good thing so far is that we do not have any outstanding arrears from all companies that committed themselves into the scheme”. A recent public statement from BECI informed members of the public and business community that the application period for the COVID- 19 Loan Guarantee Scheme has been extended by a further 12 months to 31st March 2022. ‘ This is in recognition of the continued impact of COVID- 19 to the businesses, and the need to provide guarantee support for working capital financing by the participating banks. ‘ The Scheme Guidelines shall be amended accordingly in due course. Submission of application to benefit from the scheme by respective participating banks shall continue until the 31st March 2022’.