The Botswana financial sector that seemed to be insulated from the global crisis is beginning to feel the heat, as top banks have suspended loan applications from mine workers because of declined job security.

A survey conducted by Business Week established that top commercial banks, no longer accept personal or home loan applications from workers from the mining sector and related industries.

The crunch began with the bank and the property markets in the United States of America (US) before spreading across the Atlantic into Europe and Africa, and early indications in Botswana were that only the mining and related industries would be severely affected.

But alas the devastating effects on the mining and banking sectors are begging to show.Already Stanbic bank is struggling to recoup the $10 million loaned to DiamonEx, which is now under judiciary management, despite being guaranteed by government.

First National Bank Botswana (FNBB), which had actually established a mining department to take advantage of the mining boom, say that in as much as they are willing to assess each application on its own merits, they have placed a blanket ban on all applications from workers whose employers have indicated they would be retrenching to cut costs.

"The bank will assess all loan applications on their own merits."

But so far the bank has rejected all requests for funding from such applicants until the bank is in a position to fully assess the risk profile," said the bank's deputy chief executive officer (CEO) Richard Wright.As a survival strategy, Wright says, the bank is in the process of looking at its qualifying criteria. Asked to comment on whether there has been a sharp rise in the number of defaulters, Wright acknowledged that there has been a slight increase adding that FNBB is not a large player in this mining segment, hence "we do not believe that the bank will be affected to any great extent".A woman who answered the phone at the Standard Chartered Loan Centre in Gaborone yesterday revealed that the bank stopped accepting loan applications from all mining workers late last year.

"We received an instruction to stop taking applications from mining workers until the situation changes in the economy," she said.In a response to a the Business Week questionnaire, Head of Corporate Affairs Thabi Letsunyane said:

"Given the current economic climate Standard Chartered Bank has reviewed its loan approval process for all sectors, including mining houses, and continues to adhere to international lending criteria."

She added that Stanchart continues to process loan applications from all sectors of the economy, including mining, subject to clients meeting set criteria.

Questions forwarded to Barclays Bank of Botswana had not been responded to by the time of going to press.