1. What is the Export Finance and Insurance
Scheme?
The Export Finance and Insurance Scheme facilitates
lending to exporters by providing credit guarantees
to commercial banks on behalf of financed exporters.
The scheme was established by the Government of
Lesotho and is administered by the Central Bank of
Lesotho in collaboration with the commercial banks.
The Central Bank supports an exporter by
guaranteeing 50% of credit extended by the
exporter’s bank. The credit facility is only for
working capital requirements.
2. The objective of the Export Finance and
Insurance Scheme
The key
objective of the Scheme is to enhance economic
growth by assisting local exporters gain competitive
advantage in the international markets, with the aim
of achieving poverty reduction and job creation.
3.
Who is eligible to borrow under the scheme?
Only
applications from exporters will be considered. In
addition such exporters must meet the following
criteria:
• The applicant must have been in the export
business for at least one year.
• The applicant’s business must export at least 50%
of its annual production.
• All of the exporter’s merchandise/service must be
manufactured in Lesotho with a Value Added component
of least 35%.
• The applicant must have a valid export order.
• A large scale exporter must have a linkage with
Basotho businesses.
• The applicant must keep a proper set of business
records.
4. What are minimum and maximum loan amounts.?
Minimum amount that can be borrowed under the scheme
is M50,000. Maximum amount for small scale
businesses is M1,000,000 while large scale
businesses can borrow up to M5,000,000.
5. What is the distinction between small and
large scale enterprises?
For purposes of the Scheme, a business with a staff
complement of less than 50 employees or whose total
annual turnover is less than M5,000,000 is
classified as a small scale enterprise. A business
with a staff complement of 50 and more or whose
total annual turnover is M5,000,000 and more is
classified as a large scale enterprise.
6. What is the duration of the guarantee cover?
The
guarantee cover shall be for a period of one year
from the date of issue.
7. What will be the interest rate?
Commercial banks will charge exporters interest up
to the maximum of the prevailing prime rate.
8.
What other fees are payable?
A non-refundable application fee is payable upon
submission of an application.
• For small scale exporters the fee is 0.5% of total
amount applied for but shall not exceed M500.
• For large scale exporters the fee is 1% of the
total amount applied for but shall not exceed
M15,000.
In addition to the application fee a financed
exporter will be charged a quarterly guarantee fee
at the rate of 0.75% on the highest amount
outstanding in each quarter.
9. Insurance
The exporter has to take insurance cover against
both commercial and political risk.
10. Security
The exporter is expected to put up collateral for
uninsured component of the lending. Such security
may comprise the assets of the exporter, irrevocable
letters of credit, any bills insured by the bank of
the buyer, advance payments or any other form of
security that may be agreed upon between the bank
and the exporter.
11. Where can applications be directed to ?
Applications can be submitted in any branch of
Lesotho Bank(1999) Limited, Nedbank Lesotho and
Standard Bank Lesotho. Enquiries can also be made at
the following addresses of the banks:
Lesotho Bank (1999) Limited, Lesotho Bank Tower,
P.O.Box 1053, Maseru 100
Tel: (+266) 22315737
Fax: (+266) 22310268
Nedbank Lesotho Limited: Nedbank Building,
Kingsway
P.O.Box 1001, Maseru 100.
Tel: (+266) 22312696
Fax: (+266) 22313921
Standard Bank Lesotho Ltd: Standard Bank
Building, Kingsway
P.O.Box 115, Maseru 100
Tel: (+266) 22312423
Fax: (+266) 22310235
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