Monday, August 15, 2022

CEDA CEO warns sponsors as arrears position swells

CEDA, the Government underpinned development agency, warned defaulters it is in the process of driving a turnaround collections strategy that will see concerted efforts being made towards recovering millions of Pula it is owed by project sponsors.

At his first media briefing on Monday, the new CEO, Thabo Thamane, said it is important arrears are brought down in order to use the money from the revolving fund to finance new projects.

“CEDA will no longer accept to be at the bottom list of creditors,” warned Thamane. “The show time is over. We need to revolve this fund and lend to Batswana.”

By the end of December 2010, the agency, which is about 10 years old, was owed P219 million, which is 22 percent of its total loan book.

CEDA’s loan is P1 billion (P1, 012 million) with 2,045 entrepreneurs funded since inception.
However, the arrears position is only 2 percent more of the 20 percent target set by CEDA and Thamane hastened to say it will be brought down.

The former Head of Agribusiness at the agency revealed the loan contamination is prominent in Francistown, Gaborone, Palapye and Kanye and sponsors’ excuse is issues like lack of market.

The arrears position arises mainly from the non-payment of loans by funded entrepreneurs.

“It will go down,” he said. “We can no longer rely on government capilalisation year in and year out. Government has other priorities.”Collections continue to be problematic for the agency, but CEDA is in the process of driving a turnaround collections strategy, which will see concerted efforts made towards recovering monies borrowed.

Currently, the CEDA’s collections are 77 percent against a target of 80 percent. The problem deducted from non- payment is Batswana’s grant mentality attached towards the agency, which from the past has caused CEDA to be perceived as a soft loan institution.

Despite the warning, the new CEO revealed that sponsors should not run away from them as there could be ways of settling the debt.

“When you come to us, we are amenable to paying plan.”

The large chunk of the agency’s loan book is accounted for by agribusiness. It has a lion’s share of P466 million, followed by property and manufacturing at P352 million and services, which account for the remaining P194 million.

Thamane said the aim will be to finance viable projects and not impoverish Batswana, adding that in his next five years as top man, his aim will be to instil public confidence in the agency.
Because of its mandate, CEDA cannot be aggressive like profit motivated commercial institutions that can send sheriffs if repayments are not made.

“It is a challenge for us,” said Thamane, adding that they are still within their mandate as they rank amongst those that fund start-up businesses in the country.

“We urge businesses failing to meet contractual obligations with CEDA to come forth and make arrangements with us”.

In a move that will also instil confidence in the financial services sector, the new CEO revealed CEDA will not compete and crowd the private sector.

“We are not going to compete with commercial banks,” he said.

“We will be knocking on their doors (in a bid) to partner to promote SMMEs,” he added.
Thamane also pledged to improve the turnaround time and pleaded with aspiring entrepreneurs to exhaust internal structures before ‘clients could go somewhere else’.

Although, he did not elaborate on what that meant, the inference is that some people if their projects or ideas are not funded, rush to politicians as has happened in the past.


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