The Citizen Entrepreneurial Development Agency (CEDA) says it has received 67 applications valued at P26 million for the Industry Support Facility (ISF).
The ISF was launched last year by the Minister of Investment Trade and Industry (MITI), Peggy Serame as part of the Economic Recovery Transformation Plan. About P1. 3 billion was made available to firms and individuals via development finance institutions that include CEDA and other sister agencies.
CEDA chief operations officer, Andrew Madeswi said they were allocated about P300 million to assist Small, Medium and Micro Enterprises (SMMEs) navigate the impact of the pandemic.
“The Facility is meant to extend financial support to businesses that have been affected by COVID-19 so as to revive the economy, protect jobs and promote opportunities for economic diversification,” he said.
Under the ISF, CEDA has undertaken to finance all sectors of the economy in exception of tourism and agriculture, which are covered by other agencies. Under the facility,
CEDA will disburse loans amounting to a minimum P500 and maximum of P1 million with interest charged at the prevailing Bank Rate. “CEDA has undertaken to charge interest equivalent to prime lending rate minus three percent for special sectors such as manufacturing, mining, construction, energy, technology and innovations, as well as the creative industry,” Madeswi added.
He said in a deliberate effort to remove barriers and make the Facility as accessible as possible, CEDA will not require security for the
“Companies that apply for ISF must not have benefitted from any other programme offered by government specifically for COVID-19 relief purposes.”
The remainder of the funds will be administered by sister agencies like National Development Bank (NDB), Local Enterprise Authority (LEA), Botswana Development Corporation (BDC) and Botswana Tourism Organisation (BTO).
Madeswi said CEDA accepts applications to fund the operating costs and working capital needs for the short and medium terms.
To qualify for ISF, companies must have a maximum turnover of P10 million and CEDA will only give out loans not exceeding 10% of the company’s annual turnover. The Facility is only available to 100% citizen-owned businesses that have been in operation for at least six months.
CEDA will require benefitting companies to make an undertaking not to reduce employment during the loan period.
Madeswi explained that businesses that have operated up to three years will be required to pay back their loans within 60 months, while those that have existed for more than three years will be required to repay their loans within 12 months. A grace period of up to six months can be granted at no interest charge.