The Citizen Entrepreneurial Development Agency (CEDA) has launched a new product that undertakes to provide funding for securing assets and to provide working capital for small businesses. The new offering, Mabogo-Dinku, follows a study the agency conducted in 2015 that conclusively directed towards the need to create a customised microfinance solution for micro enterprises.
In order for someone to benefit from this product, an individual should belong to a group of minimum 5 and maximum 15 individuals. The group loan limit is linked to the amount of savings and as such a group qualifies for 10 times their contribution amount and contribution amount and the group can increase the amount of loan they qualify for with an increase to the savings but with limitations of financing up to P150, 000.00 per individual in addition to the savings determining factor.
The agency has entered into an agreement with Barclays Bank of Botswana and Botswana Savings Bank to facilitate the savings component through their suitable savings products.
CEDA Chief Executive Officer, Thabo Thamane revealed that as the agency continuously assesses its impact and product uptake, it came to the realisation that it is experiencing low uptake by micro enterprises.
“As the agency is mandated to serve the development of SMME in totality, in order to improve the imbalance or uptake by micro enterprises, we instituted a study to examine all products particularly to micro enterprises with a view to determine the reasons for low uptake and possible solutions to improve the uptake,” Thamane said.
“The study was concluded last year February, 2015 which conclusively directed towards the need to create a customised microfinance solution for Micro enterprises.”
The study primarily identified that the design of CEDA’s current requirements to access funding, limit the capacity of micro enterprises to fulfil or meet such requirements.
“In view of this conclusion, the agency has since then been developing a microfinance product of which today we are excited to usher you a product ready for the micro enterprises in the form of ,Mabogo-Dinku.”
The product is targeted at the low income micro businesses that are not able to access the main CEDA Development Fund. Mabogo- Dinku was officially launched to the media at a Media Launch held at Masa Square Hotel on the 30thAugust 2016.
The purpose of Mabogo-Dinku is to provide Batswana with subsidized loans for various micro-enterprises to enable citizen participation in enterprise development. The Mabogo-Dinku loan provides enterprises with funds for their business needs such as working capital and small asset finance.
The CEO also explained that Mabogo-Dinku will be available to Batswana in all types of sectors across the country.
According to Thamane, whilst Mabogo-Dinku will be offered across gender, Microfinance products have been found to be effective in uplifting women and youth economically. “Mabogo-Dinku will therefore ensure an increase in operating income which is important for women and youth economic empowerment through raising their own capital thereby having a significant control over their lives.”
“As the Agency, we launch Mabogo-Dinku with a high-level of confidence that it will provide greater social and economic impact to the many Batswana who work very hard to create income for themselves and sustain the livelihood of their families,” he added.