Small Businesses in Botswana Struggling to Get Bank Loans

small business loan

If your small business is in a tight spot, you might want to get a bank loan to relieve the financial strain. Unfortunately, this might not be as easy as you think. More and more small businesses in Botswana are struggling to secure bank loans.

In the wake of the 2008 financial crisis and lingering effects of recession, loans are not as easy to secure as they used to be. In particular, small businesses are finding it tricky to secure business loans from major banks.

Non-performing loans and debt in Botswana

The lending rate might be at an all-time low of 6.5% but the Bank of Botswana has specifically voiced concern about non-performing loans. This has been exacerbated by poor performance in the business sector.

The increase in individuals and businesses failing to repay loans is becoming a worrying trend, Moses Pelaelo, governor of the Bank of Botswana, advised late last year. This, he said, could negatively affect the country’s banking sector.

In the face of rising debt in Botswana, commercial banks are becoming cautious when it comes to credit. Whether it’s business finance or a personal loan, Batswana can expect much stricter lending criteria from banks going forward.

Asset-based loans for small businesses

If you are struggling to secure a business loan from a bank, then asset-based loans are the perfect alternative. You can use an asset owned by your business, such as a paid off vehicle, as collateral for the loan.

This simplifies the process because the loan amount is based on the value of the asset and not the value of your business or its cash flow. The process is also simpler and quicker, with less paperwork and a much quicker turnaround time.

Advantages of an asset-based loan

A business loan from a commercial bank may be the more traditional option, but asset-based loans have a range of advantages that often make them the better choice.

For example, these are among the benefits of an asset-based loan:

  • funds are paid out fast – usually within 24 hours of application
  • the loan doesn’t affect your credit history
  • risk is minimal – the loan is backed purely by the asset you provide as collateral
  • once you repay the loan and agreed interest, your asset is returned to you
  • the loan doesn’t affect your ownership of the asset
  • the application process is simple, quick and transparent.

Asset-based loans from lamna Botswana

At lamna Botswana, we offer fast, discreet loans against the value of a wide range of assets.

We’re the Botswana division of a well-established, specialty finance company that has branches across South Africa. Our interest rates are competitive, we don’t charge any hidden fees or penalties and we comply with all national credit regulations.

For more information about using an asset to secure a short-term loan, contact us on 71 388 088 or simply complete and submit our online application form.


Complete our Online Application Form