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GetBucks goes for the Bucks

GetBucks Botswana Limited has announced the opening of offer for the first tranche of its Domestic Medium Note Programme. The micro financing company is in the process of establishing and listing a P500 million Domestic Medium Term Note Programme and it intends raising between P100 and P200 million as a first tranche of the Note.


The Botswana Stock Exchange (BSE) has approved the Programme Memorandum for the Note and it is anticipated that the Note will be listed on the BSE on Monday, 30 January 2017. Proceeds from the first tranche of the Note of up to BWP 200 million will be used by the Issuer to reduce the cost of funding.


GetBucks Botswana is 100% owned by GetBucks Limited, a Mauritius entity with MyBucks, the Guarantor, being the ultimate beneficial owner. The GetBucks Botswana Group provides micro-financing and insurance products. The Issuer has 14 service points, 49 employees, 88 agents and has disbursed over 100,000 loans amounting to P345 million since its inception.


The GetBucks Botswana Group consists of three operating entities; GetBucks Botswana, TU Loans (Proprietary) Limited and CashCorp (Proprietary) Limited. The Issuer and TU Loans (Proprietary) Limited provides term loans for a period of six to sixty months and CashCorp (Proprietary) Limited provides short term credit of one month loans. Their customer base is primarily employees of the Government of Botswana, employees of forty-three Local City Councils’ in Botswana and those employed in the private sector.


The issuer also provides insurance products through their insurance corporate agent entity, Regent Insurance, to the same customer base including Botswana Teachers Union members. GetBucks Botswana Group provides their products using their IT system proprietary Fincloud software which is complemented by a physical footprint.

Other than use the proceeds from Domestic Medium Term Note programme for reducing the cost of funding, the company says Pula denominated facilities backed by the US dollar intercompany loans held as offshore deposits with Botswana banks have had a significant negative impact on the profitability of GetBucks Botswana due to the depreciation of the pula. Furthermore, GetBucks Botswana seeks to access local funding to limit currency exposure risk.


“The Issuer will be able to expand its ongoing normal operations which will be primarily used to expand the loan book of the Issuer which will see the issuer introducing new products such as Educational and SME loans as well as offer longer terms on the current product offering (with a maximum term of up to 60 months),” the company said in the programme memorandum.


The company which was incorporated in Botswana on 12 March 2012 and obtained its certificate to commence business on the same day now has an asset base of around P99 million, bolstered by the net loan book that stands P61.4 million. For the year ended June 2015, the company’s revenue surged by 70% to P61.2 million on the back of interest income and fee income which recorded significant growth.

The strong performance was offset by a jump in impairment of loan book which stood at P5.9 million, up by 310%. But the biggest drag was operating expenses as they increased by 125.5% to P31.2 million. This resulted in operating profit of P23.9 million, up from the previous year by 16.5%. However, the profit before taxation was down by 14% from the previous period after a 118% increase in finance costs. The finance costs went up as a result of money paid to shareholders, financial borrowings, and loss on foreign exchange which greatly increased to P4.6 million, an increase of 773%. In the end the company delivered profit for the period of P10.7 million, down slightly by 6%.

 GetBucks Botswana operates in a highly competitive industry that currently has 300 players registered. There is also direct competition between Micro Finance institutions (MFIs) and commercial banks due to high credit risk within the corporate sector and commercial banks have been competing with MFIs to lend to individuals who are regarded as lower risk.


“Increased competition from commercial banks that have large balance sheets and have set up dedicated units for SME banking as a way of capturing market share may negatively affect GetBucks Botswana’s financial performance..As a way of mitigating this risk, GetBucks Botswana embraces technology as a means of differentiating itself to provide financial products and services to its customers with a quick turnaround time,” the company said.

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Gambling Authority tender dangles as a jittery lottery quandary

30th November 2020
SEFALANA MD: CHANDRA CHAUHAN

Lucrative and highly anticipated national lottery tender that saw several Batswana businessmen partnering to form a gambling consortium to pit against their South African counterparts, culminates into a big power gamble.

WeekendPost has had a chance to watch lottery showcase even before the anticipated and impending national lottery set-up launches. A lot has been a big gamble from the bidding process which is now set for the courts next year January following a marathon legal brawl involving the interest of the gambling fraternity in Botswana and South Africa.

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The uncertainty of getting the next meal in Botswana

30th November 2020
uncertainty of getting the next meal

Households representing more than half of Botswana’s population-mostly residing in rural areas- do not know where their next meal will come from, but neither do they take into consideration the quality and/or quantity of the food they consume.

This is according to the latest Prevalence of Food Insecurity in Botswana report which was done for the 2018/19 period and represents the state of food insecurity data even to this time.
The Prevalence of Food Insecurity was released by Statistics Botswana and it released results with findings that the results show that at national level 50.8 percent of the population in Botswana was affected by moderate to severe food insecurity in 2018/19, while 22.2 percent of the population was affected by severe food insecurity only.

According to the report, this translates to 27 percent of the population being food secure that is to say having adequate access to food in both quality and quantity. According to Statistician General, Burton Mguni, when explaining how the food data was compiled, Food and Agriculture Organization of the United Nations (FAO), is custodian of the “Prevalence of Undernourishment (PoU)” and “Prevalence of moderate or severe food insecurity in the population based on the Food Insecurity Experience Scale (FIES)” SDG indicators, for leading FIES data analysis and the resultant capacity building.

“The FIES measures the extent of food insecurity at the household or individual level. The indicator provides internationally comparable estimates of the proportion of the population facing moderate to severe difficulties in accessing food. The FIES consists of eight brief questions regarding access to adequate food, and the questions are answered directly with a yes/no response. It (FIES) complements the existing food and nutrition security indicators such as Prevalence of Undernourishment.

According to the FIES, with increasing severity, the quantity of food consumed decreases as portion sizes are reduced and meals are skipped. At its most severe level, people are forced to go without eating for a day or more. The scale further reveals that the household’s experience of food insecurity may be characterized by uncertainty and anxiety regarding food access and compromising the quality of the diet and having a less balanced and more monotonous diet,” says Mguni.

The 50.8 percent of the population in Botswana which was affected by moderate to severe food insecurity are characterized as people experiencing moderate food insecurity and face uncertainties about their ability to obtain food. These people have been forced to compromise on the quality and/or quantity of the food they consume according to the report on food insecurity.

Those who experience severe food insecurity, the 22.2 percent of the population, are people who have typically run out of food and, at worst, gone a day (or days) without eating. According to the statistics, rural area population experienced moderate to severe food insecurity at 65 percent while urban villages were at 46.60 percent and cities/town were at 31.70 percent. Those experiencing the most extreme and severe insecurity were at rural areas making 33.10 percent while urban villages and towns were at 11.90 percent and 17.50 respectively.

According to a paper compiled by Sirak Bahta, Francis Wanyoike, Hikuepi Katjiuongua and Davis Marumo and published in December 2017, titled ‘Characterization of food security and consumption patterns among smallholder livestock farmers in Botswana,’ over 70 percent of Botswana’s population reside in rural areas, and majority (70%) relies on traditional/subsistence agriculture for their livelihoods.

The study set out to characterize the food security situation and food consumption patterns among livestock keepers in Botswana. “Despite the policy change, challenges still remain in ensuring that all persons and households have access to food at all times. For example, during an analysis of the impacts of rising international food prices for Botswana, BIDPA reported that food prices tended to be highest in the rural areas already disadvantaged by relatively low levels of income and high rates of unemployment,” said the study.

According to the paper, about 9 percent of households were found to be food insecure and this category of households included 6 percent of households that ranked poorly and 3 percent that were on the borderline according to the World Food Programme’s (WFP) definition of food security.

Media reports state that the World Bank has warned that disruption to production and supply chains could ‘spark a food security crisis’ in Africa, forecasting a fall in farm production of up to 7 percent, if there are restrictions to trade, and a 25 percent decline in food imports.

Food security in Botswana or food production was also attacked by the locust pandemic which swept out this country’s vegetation and plants. The locust is said to have contributed to 25 percent loss in production.

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Solid demand for diamonds towards the ‘gift’ season

30th November 2020
Diamonds

Global lockdown have been a thorn in diamonds having shiny sales, but a lot of optimism shows with the easing of Covid-19 restrictions, the precious stones will be bought with high volumes towards festive season. The diamond market is however warned of the resurgence of Covid-19 in key markets presents ongoing risks amid the presence and optimist about the new Covid-29 vaccines.

The latest findings published as De Beers Group’s latest Diamond Insight ‘Flash’ Report, which looks at the impact of the pandemic on relationships and engagements, has revealed that in the US that more couples than ever are buying diamond engagement rings. Bridal sales is mostly the primary source of diamond jewellery demand in recent months, De Beers said.

According to De Beers, interviews with independent jewellers around the US revealed that the rate of couples getting engaged has increased compared with the period when Covid-19 first had an impact in the US in the spring.

“In addition, despite challenging economic times, consumers were spending more than ever on diamond engagement rings – often upgrading in colour, cut and clarity, rather than size. Several jewellers speculated that with consumers spending less on elaborate weddings and/or honeymoons in the current environment, they had more to spend on choosing the perfect ring,” said De Beers.

According to De Beers, a national survey of 360 US women in serious relationships, undertaken in late October in collaboration with engagement and wedding website, The Knot. This survey is said to have found that the majority of respondents (54%) were thinking more about their engagement ring than the wedding itself (32%) or the honeymoon (15%), supporting jewellers’ hypothesis that engagement ring sales were benefiting from reduced wedding and travel budgets in light of Covid-19 restrictions.

When it came to researching engagement rings, online was by far the predominant channel for gaining ideas/inspiration at 86% of consumers surveyed, with 85% saying they had saved examples of styles they liked, according to De Beers. According to the survey, only a uarter of respondents said they had looked in-store at a physical location for design inspiration.

“For many couples, the pandemic has brought them even closer together, in some instances speeding up the path to engagement after forming a deeper connection while experiencing lockdown and its associated ups and downs as a partnership. Engagement rings are taking on even greater symbolism in this environment, with retailers reporting couples are prepared to invest more than usual, particularly due to budget reductions in other areas,” De Beers CEO Cleaver said.

According to De Beers Group, its Diamond Insight Flash Report series is focused on understanding the US consumer perspective in light of Covid-19 and monitoring how it evolves as the crisis evolves. Also, the company said, it is augmenting its existing research programme with additional consumer, retailer and supply chain touch-basis to understand the pain points and the opportunities for stakeholders across the diamond pipeline.

Demand for diamonds is as hard and resilient as the precious stone itself. De Beers pocketed US$ 450 million in its recently held ninth rough diamond sales cycle, and the company says it is more flexible approach to rough diamond sales during the ninth sales cycle of 2020, with the Sight event extended beyond its normal week-long duration.

“Steady demand for De Beers Group’s rough diamonds continued in the ninth sales cycle of the year, reflecting stable consumer demand for diamond jewellery at the retail level in the US and China, and expectations for reasonable demand to continue throughout the holiday season. However, the resurgence of Covid-19 infections in several consumer markets presents ongoing risks,” said De Beers CEO Bruce Cleaver recently.

High expectations are on diamonds being a sentimental gift for holiday season or as the most fetished gift. However the ninth cycle was lower than the eighth which registered US$ 467 million. For the last year period which corresponds with the current one, De Beers managed to raise US$ 400.

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