Chema Chema Fund disbursed P3.8m by May
Citizen Entrepreneurial Development Agency (CEDA) reports that Chema Chema Fund has received an overwhelming response from the informal business community with 4,230 applications submitted, representing a total funding value of P50 million.
Out of these applications, 3,159 have been approved, amounting to P28,3 million and 476 amounting to P 3,8 million have been disbursed as of May 27. With 811 approved applications totaling P8,5 million, agribusinesses account for 26 percent of the total approved funds. Manufacturing has seen 175 applications approved with a funding value of P2,1 million accounting for six percent in total. CEDA CEO, Thabo Thamane said it should be noted that CEDA’s mandate as a developmental financial institution has at its core the objective of financing previously excluded individuals and enterprises who are deemed to be risky by commercial institutions.
He pointed out that as a major player in the SMME sector, CEDA has processes in place for management of non-repayment starting with monitoring to enable proper intervention that can reduce the likelihood of non-repayment, mentoring service to ensure challenges are addressed accordingly, including engagements with clients to restructure their loans where necessary. “We however have the right to take appropriate action against non-repayment in situations that have proof of unwillingness to pay or intentional non-compliance to loan conditions.”
He said it is important to note that Chema Chema is a revolving fund thus citizens are encouraged to repay the loan accordingly in order to access second and subsequent loans and also to build their credit profile which is essential for future access to credit facilities. Dominating the distribution, the services sector has received 2,173 approvals, corresponding to P17,6 million which is 69 percent of the total approved funds.
The informal SMME sector, employing around 200,000 individuals and contributing approximately five percent to the nation’s GDP, is a cornerstone of Botswana’s economy. Historically, these businesses have struggled to access traditional funding, a gap that the Chema-Chema Fund is designed to bridge. With an initial seed capital of P500 million, the Chema-Chema Fund offers revolving credit to cover start-up costs, working capital, and essential equipment purchases.
The favourable terms, including a one-off interest rate of 2.4 percent and up to 12-month repayment period, are designed to make the funds accessible and manageable for informal businesses. As of Monday last week, 968 youth (aged 18-35) have been funded, amounting to P8,6 million representing 31 percent of the total approved applications. Additionally, 25 people living with disabilities have received funding totaling P230, 295. A gender-based analysis of the approvals shows that 2,257 women have received loans totaling P17,2 million, which is 71 percent of the total approved funds, compared to 902 men who have received P11 million or 29 percent. Minister of Entrepreneurship, Karabo Gare recently emphasized the Fund’s role in promoting economic inclusion, aligning with the Economic Inclusion Act of 2021.
He said this act reinforces affirmative action measures to ensure marginalized groups’ participation in the economy, showing the Chema-Chema Fund’s strategic importance. “The successful deployment of the Chema-Chema Fund is crucial for the continued growth and resilience of Botswana’s informal SMME sector.” As these businesses take advantage of the funding, they are expected to drive innovation, create jobs, and contribute more significantly to economic prosperity. CEDA and LEA’s roles in administering and supporting these businesses remain pivotal, providing not only financial but also developmental assistance to maximize the impact of the programme.