Botswana-Economy-Loan

COVID-19: Botswana unveils guarantee scheme for bank loans

APA-Gaborone (Botswana)

The Botswana government on Saturday unveiled a loan guarantee facility to assist companies whose operations were affected by a coronavirus lockdown imposed in early April.

Ministry of Finance and Economic Development spokesperson Fenny Letshwiti said the loan guarantee scheme is part of the government’s economic response to the COVID-19 pandemic and would be available to businesses from all eligible economic sectors.

“The purpose of the scheme is to encourage lending to qualifying businesses by offering a partial government guarantee of 80 percent to banks against losses to eligible applicants,” Letshwiti said in a statement.

This means that all firms impacted by the lockdown would be allowed to apply for loans from banks and the government would partially guarantee to repay the loan should the companies fail to repay the loans.

Banks would be expected to “retain the remainder of the 20 percent risk of financial facility.”

Botswana is gradually re-opening its economy, with a number of sectors now allowed to operate.

JN/APA

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