Snapshot Of BECI’s COVID-19 Product Pivot

IMPROVING CASHFLOW FOR LOCAL BUSINESSES GRAPPLING WITH THE IMPACT OF THE GLOBAL PANDEMIC

FOUNDED IN 1996, BECI (EXPORT CREDIT INSURANCE AND GUARANTEE COMPANY BOTSWANA) IS A PRIVATE COMPANY WHOLLY OWNED BY THE BOTSWANA DEVELOPMENT CORPORATION LIMITED (BDCL) AND IS THE ONLY CREDIT INSURER IN BOTSWANA. WITH ITS PRIMARY FUNCTION BEING TO DEVELOP AND EQUIP BUSINESS WITH TRADE CREDIT INSURANCE POLICIES TO PROTECT THEM FROM THE DANGER OF NON-PAYMENT BY CREDIT CUSTOMERS, THE COMPANY NOW OFFERS A SELECTION OF BUSINESS GROWTH TOOLS SUCH AS CONSTRUCTION BONDS AND GUARANTEES, INCLUDING THE COVID19 LOAN GUARANTEE SCHEME IN RESPONSE TO CHALLENGES ARISING FROM THE GLOBAL PANDEMIC.

Understanding the work of Export Credit Agencies

Export Credit Agencies (ECAs) such as BECI are entities that offer export credit insurance, guarantees or financing agreements which enable a foreign buyer of exported goods and/or services to defer payment over a period. ECAs are ordinarily wholly or directly owned by central governments, with some exceptions where such holding would be through a local authority or a state-owned enterprise.

Instances of privately owned ECAs are quite rare and limited to an agency set up where the private owner is contracted to act in the interest of a government. BECI is a member of Berne Union, and International Union of Credit and Investment Insurers. Export Credit Agencies have a primary focus of boosting exports and facilitating trade credit and in so doing, achieve a range of other objectives of national importance including the facilitation of expansion of businesses and employment creation, improve international competitiveness, increase exports, strengthen the balance of payments, and promote and promote economic diversification.

Addressing marketplace cashflow problems in light of COVID-19

BECI CSR Committee launched a new product called the ‘purchase order facility’, aimed at improving cash flow, enabling access to capital (getting back up from BECI guarantees), thereby reducing the risk of non-payment. Due to the increase in purchase orders from the government especially from the Ministry of Health to procure the much-needed equipment and services in combating the Covid19 pandemic, the purchase order facility has been allocated to local businesses and instrumental in assisting them with operational expenses or fully resuscitate them.

The pandemic has resulted in the crippling of a multitude of business across varied sectors globally, with some local businesses experiencing significant challenges that resulted in total bankruptcy, or severe limitations in capital to deliver on their mandate and strategic objectives. It is therefore no wonder that in turn, suppliers in Botswana and elsewhere, are also skeptical on offering credit as was previously the case. It is also with such challenges that BECI has stepped in to alleviate financial constraints for local business owners, seeing it fit to issue out guarantees to these affected organizations to facilitate the delivery of goods and services, as well as honoring of payments.

More on BECI’s commitment to impacting communities.

BECI’s Corporate Social Responsibility Committee credits the knowledge and experience they have gained over the years about Botswana’s business fraternity, as the conduit by which to better offer financial planning and credit management information to strained businesses daily, thus guaranteeing economic sustainability. BECI takes pride not only in ensuring economic sustainability but in partaking in community work, with some of their past CSR initiatives including but not limited to donating uniforms and toiletries to adopted, disadvantaged children in the SOS Children’s Village, committing time towards volunteerism and having Christmas lunch with them.

Recently, BECI also donated wheelchairs to the Botswana Cycling society in the Kgalagadi region. The organization is also currently looking at the raising funds to donate to the Cancer Association of Botswana, adopting a school to assist with the buying of school uniform for less privileged children and sharing financial literacy tools with the students in a bid to equip them with information that would contribute towards economic sustainability for the future generations.