Archive for April 7th, 2007

source: The Voice
By Chedza Simon
The Citizen Enterprise Development Agency (CEDA) will review its loan facility-lending scheme to help grow the small medium enterprises.
The review of the loan facility which has a maximum of P2 million was revealed by CEDA board chairman, David Magang and the Minister of Finance and Development Planning, Baledzi Gaolathe at a breakfast meeting hosted by CEDA for Members of Parliament (MP) at Gaborone International Convention Center (GICC) this week.

Magang says the CEDA scheme is limiting Batswana to small businesses as it does not go beyond P2 million. Citizens, main beneficiaries of the scheme own 43 percent of small, micro and medium enterprises (SMME) in the country. He said this scheme “cannot finance large scale projects or jointly participate with other institutions for large scale projects. Even the CEDA venture capital is not helpful because it is limited in terms of period. The seven years period means it cannot undertake long term ventures.”

Also worrying the chairman is that “loan conditions for different sectors are the same and do not take into consideration the peculiarity of that sector.” He advocated for a structured policy to effectively support small businesses, saying the absence of a framework results in various arms of government working at a cross purpose, thus defeating the ends of small businesses development.
Magang is concerned that there is lack of market for small and medium businesses. “The provision and access to market in a coordinated manner is key to the survival of small businesses. Market is an enabler for SMME development. Without market it is difficult to develop SMMEs and empower citizens. Government is the main supplier and consumer of goods and services and therefore lack of access to the government procurement system by SMMEs further hinder their growth. Lack of access to government procurement systems by SMMEs leads to exporting jobs to other countries.”

MP for Gaborone North, Keletso Rakhudu agreed that the P2 million ceiling is too low, suggesting a10 percent adjustment to be in line with inflation rate. “It should be increased to at least P3, 2 million because it is just too low to work on big projects. But The P3, 2 million is also not enough. Structures of loan repayment should be reviewed as well.” Minister Gaolathe emphasised that the CEDA scheme has been in operation for more than five years adding that time has come for the scheme to be reviewed. “Parliament has also debated a number of motions and questions asked, which would have a direct impact on the operations of CEDA. The review include the loan limits, coverage of certain economic sectors, and the lengthy of repayment periods.”

The Minister reported that the CEDA review by government is on going with estimated completion date at the end of July or early August this year.