16 Feb 2020

Government has launched a medium and long term (MLT) export credit insurance product through Botswana Export Credit Insurance (BECI) .

Speaking at launch of the product on Thursday, Assistant Minister of Investment, Trade and Industry, Mr Karabo Gare, said the insurance product ushered in a new chapter in the provision of government support to entrepreneurs by providing credit and investment for cross border operations.

That, he said, was a milestone for the country since government support for medium and long-term export credit had previously not been available, therefore, through the product, government was moving to provide 100 per cent reinsurance cover to BECI.

He indicated that the full reinsurance cover would in turn enable BECI to underwrite export credit finance for periods of 10 years and even longer.

Thus, Mr Gare urged entrepreneurs and project promoters to pursue projects of a capital nature outside Botswana and participate in supplying items to such projects.

“MLT export credit insurance brokered through BECI will enable Botswana enterprises to tender for projects or even participate in projects in other countries,” he said.

He also said the insurance product would also enable opportunities for companies to source financing from local commercial banks, which would be guaranteed by government through BECI.

“Outward Investment Insurance (OII), a product related to MLT will be rolled out by BECI after completing the requisite legislative changes henceforth our enterprises will be enabled to unlock economies of scale or economic realities which may not be available in Botswana,” he said.

Furthermore, Mr Gare urged the business community to utilise the project and create employment for youth, something he said should be possible because government had trade agreements that should be fully utilised.

“Market access and access to credit should no longer bother business community and this product should make impact in cross border expansions and trade,” he said.

BECI general manager, Mr Cowell Habana urged businesses to take advantage of the product.

“It is time to act and BECI take on the challenge by supporting government’s efforts through the stimulus instrument being launched. BECI pioneered export credit insurance which allows our enterprises to break into export markets and create new frontiers,” said Mr Habana.

He indicated that they were privileged to now take their underwriting to a new level which entailed MLT export credit insurance cover for up to 10 years and outward investment insurance for up to 15 years.

“One of the challenges highlighted by the business people is inability to secure funding because they cannot raise the required security collateral to support their operations,” he said.

Mr Habana said was happy that the MLT would fill the gap so as to support local business to enable them to thrive.

He also indicated that BECI was ready to implement the new products which, he said were undeniable game changers in financing and insurance solutions value chain. ENDS