The Citizen Entrepreneurial Development Agency (CEDA) has said about 72% of the businesses they assisted survive beyond infancy stage.
CEO of the DDevelopment Finance Institution, Thabo Thamane noted that the figure includes those that are struggling to pay back their loans, but are still in operation and employing people.
“Most of CEDA-assisted businesses stand a better survival rate and are creating employment,” Thamane said. This 72% figure is calculated by dividing propensity of the start-up that survive in the next three to five years by total number of businesses funded.
Previous studies have revealed that a number of local Small, Medium and Micro Enterprises (SMMEs) fail during the first establishment phase of their business, which is the first three to five years of operation. Meanwhile, Thamane has urged Batswana to move away from being spectators in the business landscape and rather become players. He said the new CEDA guidelines which were launched last year address hurdles and policies that made it hard for locals to access funding before.
Thamane said they have identified sectors that can be given special consideration and have the potential to create jobs. These include manufacturing, tourism , energy, technology, innovation, construction and the creative industry.
He added the identified sectors can drive the economy and took out the security requirements as well as extended loan repayments period. Since the
“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 added. Under these sectors, CEDA can extend loans of up to P50 million and also give personal surety that sponsors commit that they will be able to pay debt even when the business fails. “There has a very interesting uptake under the new guidelines. However, I want to caution citizens to be cautious and always do due diligence when buying existing businesses,” he said. Thamane noted that many applicants fail to submit convincing business plans, as mostly they are rushed, while some are done by consultants.
“Access to funding is not a problem locally, but the problem is the ability of our applicants to put a convincing case in front of the lender.
We do have cases where the applicant fails to substantiate what is in the proposal,” he said. CEDA has recently conducted a study on manufacturing with the aim of establishing why Botswana is a net importer of everything.