Revised Lending Guidelines Boost CEDA Loan Book
Pauline Dikuelo | Monday August 17, 2020 15:09
Data from the development financial institution shows that about P20 million was allocated to manufacturing, services at P12 million, and property sector got P8 million while agribusiness was financed for P700,000.
The Agency recently launched a new set of revised guidelines which offer entrepreneurs an opportunity to be funded up to the tune of P50 million with no collateral. The move is part of President Mokgweetsi Masisi’s roadmap to create wealth for indigenous Batswana while building a strong middle class.
CEDA chief executive officer, Thabo Thamane said they have identified sectors that can be given special consideration and have the potential to create jobs. They include manufacturing, tourism , energy, technology, innovation, construction and the creative industry.
“We want to encourage Batswana to venture into sectors that can contribute to the country’s GDP thus drive the economy. It is very crucial to consider the import bill when doing your market research as an entrepreneur,” Thamane said.
Under these sectors, Thamane said they can extend loans of up to P50 million and also give personal surety that they will be able to pay debt even when the business fails. In addition he said they have waived the security after realising that it hindered most entrepreneurs to approach them to seek funding. However, he said they have power on over financed assets.
“We had situations before where entrepreneurs would buy equipment outside the country only to realise that it is not what they expected. We lost money as we were forced to pay for these assets of which some were of low quality and not reliable. So we are cautious about that and have been talking to banks to come on board and protect both CEDA and the client in such instances,” the fired up Thamane added.
He advised against all businesses being centred in urban areas noting that about 65% of their loan book is not in the urban areas. On yearly a basis, Thamana said their target is to fund P450 million worth of projects.
He also encouraged Batswana to venture into the tourism, construction, mining and also called on the creative industry to come forward and seek funding.
CEDA recently also launched Letlhabile, a stimulus programme that specifically focuses on uplifting the informal sector. The scheme provides loans from as little as P500 up to P10,000 to businesses in retail , services, transport, agriculture and other types of micro-enterprises.
The product target individuals who predominantly sustain their livelihood through business activities in micro and informal enterprise.
It also focuses on supporting businesses in the informal and micro enterprise sector that were in existence and trading prior to COVID-19 pandemic, specifically prior to February 29, 2020.
The time horizon for the programme is six months effective May 15 till November 2020.