Divestment from CEDA Venture Fund nears end
Pauline Dikuelo | Friday February 24, 2017 17:05
Speaking to BusinessWeek, the chief operations officer, Andrew Madeswe said that from over ten firms, they currently have three companies left at various stages of their business cycles.
“We are at the tail end of divesting all companies, which were held under the CEDA Venture Capital Fund,” he said.
Some of the companies in the CVCF portfolio included Delta Dairies (liquidated), Aon Botswana, PG Timbers, Mabule Breweries, Airway Express, ZS Botswana, Builders Merchants Botswana, Tannery Industries Botswana (liquidated) and Biz Capital. The minimum amount for investment under the fund was P500,000 with a ceiling of P30 million.
In a report submitted to the Public Accounts Committee about two years ago, CEDA chief executive officer, Thabo Thamane said a forensic audit was underway.
Under a 10-year deal, VPB was in 2003 tasked to manage the P200 million Fund and invest in different economic sectors through either debt or equity.
At the end of the 10-year lifespan of the CVCF in 2013, some of the companies invested in had been liquidated, while the fund managers had managed to exit some of the investments.
Further, Madeswe noted that CEDA beneficiaries face challenges, which include market related and business related conditions. The conditions mostly affect start-up businesses, which form the greater part of the CEDA profile.
“As a development finance institution, CEDA faces challenges like relatively high input costs, lack of skilled manpower, promoters business experience and access to markets just to mention a few,” he said.
In addition, Madeswe said CEDA has financed businesses across the economy, but places emphasis on sectors that are considered to have an impact on the economy at an SMME, level, which includes agribusiness, property, manufacturing and services. Last year, the agency introduced ‘Mabogo Dinku’ after identifying a gap and found that micro-entrepreneurs were experiencing prohibitive challenges to access the CEDA fund hence the reason the agency modified its terms to improve access to credit by micro-entrepreneurs.
They included simplified application documentation, which is available in English and Setswana, no asset collateral required, shorter turnaround time as well as group mentoring and training support platform.