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NDB loan burden hovers over P500million

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The National Development Bank finds itself crippled by non-performing loans which are hovering at over half a million. In an engagement with the media last Friday, the Chief Executive Officer of the soon to commercialise development bank, Lorato Morapedi revealed that the business is going through a tough trading environment. Non- performing loans (NPLs) are on the shoot up.

“As at March 2017 our level of NPLs is at P672million which is 45 percent of our loan book. For 2015/16 we took a conscious decision to slow down disbursements to P122million from the normal average of P400million in the previous years. The lower the disbursements the lower the revenue,” revealed Morapedi. Just recently, Bank of Botswana Governor, Moses Pelaelo expressed concerns on the recent upward trend in non-performing loans.

Pelaelo said while this trend could be, in part, due to sluggish global economic activity and idiosyncratic business performance and environment, there is some evidence of lack of financial discipline on the part of some individuals and poor management practices by some businesses. The bank finances mostly agriculture projects which constitute 48 percent of its loan book, 16 percent amounts to the share of mortgage financing, 12 percent to commerce and retail and one (1) percent on human capital.

According to the bank’s management projects that have borrowed are unable to pay on time. For the 2015/16 reporting period, they managed to recover P116million from non- performing loans and are continuing to collect. The high NPLs resulted in high impairments leaving the bank to record a loss of P168million with the bulk coming from the impairments. “It is not a good state of affairs but what is important is that we know where this problem comes from. We are hoping to recover P100million this year.

We have revised our loan book policy and this will come up with an improved quality loan book and will see the bank’s profitability increasing,” said a hopeful Morapedi. The challenges the bank highlighted range from drought, Foot and Mouth Disease, government spending cuts, lay-offs from mining and lower interests rates amongst others.

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ADB grants BDC P4m for capacity building

Koobonye Ramokopelwa

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BDC head of human capital, Thabile Moipolai

African Development Bank has granted Botswana Development Corporation (BDC) over P4 million for training and capacity building of its staff members, the latter’s Managing Director, Bashi Gaetsaloe has disclosed.

The grant, which is $400,000 could not have come at a better time for BDC which has just begun a foray into the African continent. According to the Head of Human Capital at the investment arm of government, Thabile Moipolai, the grant will be used in areas such as investment, legal and risk, the three divisions which are considered critical as they continue to push the five -year strategy.

BDC has been given the leeway to invest outside Botswana and already some investments are being made in West Africa. Capacitating the staff in the above areas will come in handy for the African expansion.

Moipolai was answering a question from The Midweek Sun on Friday during the company’s annual stakeholder briefing where operational and financial reports for 2017/2018 were made public. The grant will be utilised in the next two years. BDC has reiterated its plan to continue to invest initiatives which are aimed at developing and retaining staff members.

“As we continue to build a strong BDC for the future, continuous learning and development is critical for our business success and therefore remains a priority area for Human Capital,” BDC 2017 annual report reads.

BDC has also developed a future focused competency based training that will be used to make informed learning and development decisions. “The (BDC) academy will also help BDC produce future leaders that are fluid and progressive through a bespoke leadership development,” reads the report.

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KBL announces return of Kickstart program

Koobonye Ramokopelwa

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Previous kickstart beneficiaries

Kgalagadi Breweries Limited, a unit of Sechaba has announced the return of Kickstart, a youth entrepreneurial development program that was suspended three years due to lack of financial resources, Managing Director, Renaud Beauchamp has told the media.

Before the program was put on ice, it had benefited over 70 small medium enterprises with funding, mentoring and market access assistance. According to Beauchamp, the revamped Kickstart will start next year, with an annual budget of about P1, 5 million. “We plan to invest in 15 new businesses every year,” he said at a press briefing which also announced a price reduction for its alcohol brands such as St Louis, Castel Lite and Black Label.

Successful applicants will receive about P200, 000 grants to execute their business ideas. Beauchamp stated that, they have been able to reintroduce Kickstart from ‘freed capital’ as a result of the recent reduction in Alcohol Levy from 55 percent to 35 percent. The clear beer price reduction comes after the Alcohol Levy, which made beer expensive, was slashed by President Mokgweetsi Masisi regime some few months ago.

Meanwhile, Assistant Minister of Trade, Industry and Investment has announced changes in trading hours for businesses that trade with liquor.

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