Nine months after Barclays launched a plan to build capacity for SMEs, the bank upbeat about the scheme - Enterprise Supply Chain Development (ESD). “The unit is making steady progress and has successfully recruited four companies to the programme me that seek to grow SME’s by providing financing,” said Reinette van der Merwe, Barclays Managing Director.
She said the bank has also started construction of an ESD centre already nearing completion, where challenges faced by Small to Medium Enterprises (SMEs) will be addressed. Van der Merwe believes SME sector is an important driver of economic growth and employment creation. Through the programme, Barclays accords an opportunity to companies to recommend some of the SMEs that deserve financial assistance in the form of loans and also get mentoring and training on record keeping.
This week Barclays hosted 20 young female farmers to share skills, knowledge and deepen relationships with the agricultural community. “We believe that effective capacity building programmes and a vibrant extensive service are important interventions that can turnaround the agriculture sector and output and also contribute to both food security and GDP,” said van der Merwe.
The MD said agriculture is an important and essential sector, hence the bank’s support of various strategic initiatives across the sector including knowledge and skills transfer, exchange and training. Her sentiments were shared by Andre Potgieter, Barclays Head of Business Banking highlighting that more than half of Africa’s population is made up of young people. “As such, it’s very important for us to be working with young farmers, who are vital to securing Botswana’s food security,” said Potgieter.
Potgieter said agribusiness continues to be a very important sector. “We are keen to support young farmers as well as other strategic initiatives,” said Potgieter. Barclays MD has recently announced that the bank is motivated by delivering mutual benefit to shareholders, customers and communities.“Bringing possibilities to life for us means helping individuals’ customers, our colleagues, small business, corporate, economies and society at large to grow,” said van der Merwe.
Barclays Bank Botswana is expecting interim consolidated profits to June 2016 to be higher than the previous period. The latest notice on improved results comes amid tough trading environment that domestic banks have been subjected to such as lower rates and sluggish economic growth.
The company which is publicly listed has however not disclosed to its shareholders how much profit to expect, save to tell shareholders and the regulator, that the results ‘will be higher than that reported for the period ended June 2015’.
The lender which is under the care of South African-born Reinette van der Merwe hinted on the profits a day after the Monetary Policy Committee (MPC) cut key lending rate from 6 percent to 5,5 percent. Bank of Botswana said a rate slash is necessary to inspire growth in the domestic market.
It is not clear what could have contributed to the rise in Barclays bank’s profits for the period under review. However, writing in the bank’s annual report for 2015, Merwe acknowledged that the sector has been under pressure in the past two years, and they are not immune to challenges which include tight regulatory changes. However, Merwe was upbeat about the year ahead(2016), saying they expect strong revenue from the retail sector. The bank’s digital platforms will also come in handy for the bank. In the last couple of months, the bank launched various digital platforms which allow customers to do banking outside banking halls using their mobile gadgets.
Barclays has also been rigorously advertising their business banking services while some of its peers developed cold feet regarding lending to capital intensive projects in the face of market turbulences. Speaking to BG Business on Wednesday, Head of Research at Motswedi Securities, Garry Juma said the bank’s restricting exercise is starting to pay off. Since Merwe was appointed to head the bank three years ago, the lender undertook a restructuring exercise both in terms of human capital and delivery channel platforms.“The bank is also coming from a lower base,” said the analyst referring to the bank’s half year results to June 2015.
During the period, the bank’s profit was P86, 9 million, compared to P123, 6million. The company has also managed to shrug off negative perception which has made the round ever since Barclays plc announced it was pulling out of Africa operations. In the just-ended period, the bank clinched a $100 million deal to fund BCL copper mine. The loan to the struggling miner has been backed by government in case the mine fails to pay up.
It is some of these corporate deals that will also keep Barclays at the top in the coming months, said Juma. Last month, the bank signed a $125 million credit guarantee scheme with Overseas Private Investment Corporation (OPIC). Under the historic arrangement, the United States government will use 75 percent of the credit risk to fund the country’s diamond beneficiation initiatives. The funding could not have come at a better time for the country’s downstream diamond cutting business, which is struggling to receive rough diamonds to process on the backdrop of reduced diamond demand globally.
Last month, minister responsible for minerals, Kitso Mokaila told lawmakers that the industry dropped by nearly half from the US$936.36 million recorded in 2014 to US$502.16 million in 2015.Two out of 21 companies that were operating in Gaborone at the beginning of 2015 had closed shop by year-end due to viability problems, stated Mokaila. “Therefore, there are only 19 operational diamonds cutting and polishing companies operating in Botswana at the moment and they employ around 2,000 people,” said Mokaila.
Barclays Bank which has upped the ante on marketing and promotional activities for its products and services has cautioned its shareholders when dealing with its securities until the results are formally released.