Barclays Bank Botswana is once again interested in financing rough purchases by local diamond cutting and polishing firms, according to a report by mmegi.bw. The report points out that many financers are reducing exposure to the diamond sector. Diamond manufacturers in Botswana bought $500 million of rough from Debswana, the De Beers-government joint venture, a 46% drop on the 2014 figures. Barclays Bank Botswana Corporate and Investment Banking head Kgotso Bannalotlhe told a sightholders networking event that the bank is now ready to do business with the industry, which accounts for the bulk of the country's GDP and foreign currency earnings.
“We know the industry has been going through some challenging times but studies have shown that it is the nature of the business. It’s cyclical. We are looking to build solid partnerships with clients that have a long reputation in the business. We need clients that can weather any cyclical volatility and build long term partnerships not just transactions that last 30 or 60 days,” he said. The local cutting and polishing industry shed around 1,500 jobs last year as a result of lower demand and liquidity problems. Barclays and other financiers may be encouraged by De Beers’ first three sights of the year which amounted to more than $1.8 billion.
Last month Bloomberg reported that after lending about $2 billion to the industry, the London-based Standard Chartered Bank is asking diamond-processing clients to secure payment insurance or provide 100% collateral for their loans.