CEDA Launches Cooperatives Product
Pauline Dikuelo | Tuesday November 16, 2021 06:00
The product seeks to finance, among others, equipment, plant, asset acquisition, working capital needs and property development.
Through the facility, CEDA will fund cooperatives either being start-up, expansion, with income-generating activities, or registered with the Ministry of Investment Trade and Industry with up to P50 million.
The level of funding will depend on the viability of the cooperative with priority given to those operating in special sectors, which are currently manufacturing, mining, construction, energy, technology and innovations, agriculture, creative industry and tourism.
While the repayment period will be in line with, the interest rates will also be consistent with the CEDA Credit Policy and Revised CEDA Guidelines depending on the loan amount.
Speaking at the launch, the Minister of Investment Trade and Industry Mmusi Kgafela said the CEDA Cooperatives Product now aims to plug some of the gaps identified around cooperative financing including training and capacity building that go hand in hand with CEDA financing.
"It is, therefore, opportune that we launch the product today as the economy rises from the throngs of the COVID-19 pandemic, which have gripped our economy in the last 18 months," he said.
Mmusi said as cooperatives seek ways of resuscitating the economic activities that the CEDA financing is targeting, the sector is availed assistance in these efforts. He said the product, therefore, has come in handy in closing this gap by providing the appropriate seed capital to the newly registered cooperatives as well as additional working capital.
CEDA CEO Thabo Thamane said the new Cooperatives Product is a financial solution to cooperative societies. He said the product is geared to support communities as they work toward poverty alleviation, improving socio-economic wellbeing and creation of employment.
"It is not meant to increase the burden of household debt but, by it, we encourage Batswana to get into special sector businesses, such as tourism, manufacturing, construction, energy, technology and innovation and the creative industries as they create employment," he said.
Government has over the years been instrumental in the development of cooperatives, as an effective rural development strategy. Through the Parliamentary Committee of Supply, in the initial stage, the government allocated a special fund, PDSF (Public Debt Service Fund), which was channelled through the cooperative bank (Botswana Cooperative Bank) for the capitalization of the cooperative projects.