Tuesday, September 29, 2020

CEDA revamps lending strategy

The owner of Foamex Industries, Lisani Ndaba, likes CEDA because it gave him capital to rescue the manufacturer of foam materials from collapse and he will be paying the last loan instalments before the end of the year.

However, other beneficiaries of CEDA, the Citizen Entrepreneurial Development Agency, say the agency could do more than just giving out loans. It should also to lobby for protection and negotiate with tender bodies to direct procurement towards funded projects.

For example, one entrepreneur in the transport sector complains that some foreign companies that came to Botswana to sell cars end up diverting from their core business.

“Some foreigners come here selling cars, but end up in the haulage business; the issue here is protection although CEDA is giving us money,” he complained.

A businessman in the petroleum sector is worried that local businesses are closed down by the government. The businessman, who runs a filling station along the Molepolole-Metsimotlhabe Road out of Gaborone has problems with the government roads department because he applied for access from them and they approved, but his fear is that because of the new highway that is being constructed they are closing down the road preventing access for motorists going towards Molepolole.

“Customers from Gaborone cannot access the filling station and our suppliers are from Gaborone because there are no depots in Molepolole,” he said.
Chief executive officer of CEDA, Thapelo Matsheka, noted that they have a similar situation with the Sehitwa Roads Department. Matsheka said the situation will pose a challenge because in Molepolole there is an Engen gas station on the outskirts that will take his clients.

“It is a reflection of what happens when things are done without taking into account business interest,” said the former University of Botswana economics lecturer, adding that it was painful to see council abattoirs closing down because of European Union (EU) requirements.

“This is what we are working on. He will intervene on your behalf,” he promised. However, Matsheka argued that empowerment of Batswana should not prevent foreigners from coming here.
The owner of Roadside Lodge asked CEDA to help them lobby land boards to help them acquire land because the existing ones are too small to accommodate the expanding lodging businesses.

Other CEDA beneficiaries say although they appreciate the restructuring process, they want the agency to agree with tendering bodies to support local businesses.

Another upcoming businessman and owner of BP Implements, Kgosietsile Mariri, challenged CEDA to allow established and promising entrepreneurs to mentor beginners.

The manager of BP Implements which operates C’est Magnifique Dry Cleaners says in the early days of their business they had problems with CEDA although they have become their favourite clients.

His points out that some of the mentors assigned by the agency are not competent with issues in the industry. He believes that CEDA should use established.

Mariri challenged Matsheka to say whether the agency could be profitable if it became independent from government.

The CEO responded that his is in the risky segment of the market and he does not announce profits like other financial institutions.

“I do not announce P350 million in profits. My profits are in the people,” he revealed.

Matsheka advises clients to be on the lookout for mentors who do not add value saying they should not accept below-standard advice.

He says Botswana is not privileged like South Africa where there is a pool of retired businesspersons and they end up using questionable mentors as consultants.

“We may have not sent the best ones to you. I always advise clients not to accept nonsense. You deserve better,” Matsheka says, adding that already clients in the tourism sector have benefited from visitors from Europe.
CEDA was briefing its customers on a new strategy which no accepts adjustments in the repayment period from five years to a maximum of 15 years.

Interest rates have also been reduced with loans less than P500, 000 paying an interest of five percent from the 7.5 percent previously paid.
The agency has also reviewed its guidelines and turning the lender into one stop centre where products that were previously outsourced now handled in-house.

The CEDA Service Forum was also aimed at engaging and creating with a pledge to hold sector specific forums in the future.

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The Telegraph September 30

Digital edition of The Telegraph, September 30, 2020.