15 Nov 2020

Local entrepreneurs including informal traders, small, micro and medium enterprises (SMMEs) as well as captains of large scale businesses can start applying for Industry Support Facility funds beginning today.

This was revealed by the Minister of Investment, Trade and Industry, Ms Peggy Serame during a press conference in Gaborone on November 14.

Accompanied by executives of parastatals tasked with implementation of the facility, Ms Serame said it had been introduced to resuscitate and boost enterprises as well as cushion them from the effects of economic contraction induced by the COVID-19 pandemic.

“Government has allocated P1.3 billion for the Industry Support Facility to support distressed businesses in different sectors. Our ministry has been allocated P700 million from the facility, which will be administered by the Botswana Development Corporation (BDC), Citizen Entrepreneurial Development Agency (CEDA) and Local Enterprise Authority (LEA) in different categories,” explained Ms Serame.

Dr Racious Moatshe, LEA chief executive officer, said the P100 million to be disbursed through his institution would support informal traders.

It included a once off P1 000 grant given to each deserving trader, constituting a third of the total amount, he said.

Dr Moatshe said a further two thirds or 66 per cent of the informal sector support would be in the form of infrastructure such as market stalls, food courts and incubators to assist businesses such as hawkers to improve operations and in acquiring market access.

First preference would be given to the over 30 000 informal businesses registered in the ministry’s  database, he said.

To access funding, traders should approach LEA offices countrywide with copy of national identity card (Omang), hawker’s licence, proof of bank account or in its absence an affidavit from one’s kgotla proving their engagement in informal trade.

It was further revealed that the P300 million due to be managed by CEDA would cover SMMEs in sectors including the creative industry, agriculture, technology and innovation, manufacturing, tourism, construction, mining and energy as well as mentoring, training and branding.

CEDA chief operating officer Mr Andrew Madeswi said the assistance was for companies with a P10 million turnover which had registered for tax.

They would be given loans equivalent  to 10 per cent of their turnover and only wholly citizen-owned enterprises that have been active for a minimum of six months would get assistance upon presentation of a formal proposal.

Meant to augment operating costs, the loan would have to be paid back over a maximum of five years.  Early repayment is however encouraged.
Interest will be based on the prime lending rate, currently 5.25 per cent, while some businesses will be given a three per cent less preferential rate.

Companies would be granted an initial six month grace period, Mr Madeswi revealed.

He also said companies would be required to make an undertaking not to fire employees during the entire loan period.

For his part, BDC managing director, Mr Cross Kgosidiile said his organisation would handle the P300 million set aside to assist large scale corporations with working capital and development funding.

These large industries with a turnover of  P50 million or above would qualify for a maximum P25 million loan, provided they are companies registered and operating in Botswana, which are tax compliant and utilise the services of registered accountants.

These firms would also have to undertake not to fire staff for the duration of the loan.

This would be an unsecured loan attracting interest at the prime lending rate.

Mr Kgosidiile said companies could present formal proposals to BDC head office in Gaborone from today detailing how they intended utilising the funds. Ends