CEDA Launches Letlhabile Stimulus
Pauline Dikuelo | Monday May 18, 2020 10:19
Letlhabile will provide loans from as little as P500 up to P10,000 to businesses in retail, services, transport, agriculture and other types of micro-enterprises.
According to CEDA CEO, Thabo Thamane, the product will target individuals who predominantly sustain their livelihood through business activities in micro and informal enterprise.
'Letlhabile will focus on supporting businesses in the informal and micro enterprise sector that were in existence and trading prior to (the coronavirus) COVID-19 pandemic, specifically prior to February 29, 2020.
The time horizon for the programme is six months effective May 15 till November 2020, ' he said. Together with the funding intervention, the agency will undertake capacity building interventions in the areas of record keeping, business formalisation, packaging and branding. These interventions will be delivered in clusters and where necessary and compelling, interventions will be done at a business level.
This comes after the informal sector was negatively impacted by the COVID-19 pandemic as the sector heavily relies on an active formal sector and the movement of the public, whose mobility has been restricted by travel restrictions implemented to control the spread of COVID-19.
Any individual who has been operating or running an informal business and can demonstrate business activity for the period at least up to February 29, 2020 through records to qualify.
'Demonstration of existing capacity to contribute towards the loan being sought to restart the business monetary or in-kind, such as equipment, tools, machinery, is important too,' he said. In addition, the applicant must be a citizen aged 18 years and above and must not have any formal employment.
The loan shall be charged at a five percent interest rate per annum on a reducing balance method and have an interest-free moratorium period of three months from the date of business trading. Personal surety shall be acceptable collateral for any loan granted.