Wednesday, February 12, 2025

Did Letlhabile ‘save the day’ for the informal sector?

“Letlhabile will focus specifically on uplifting the informal sector which has been negatively impacted by its vulnerability and reliance on an active formal sector and the movement of the public, whose mobility has been restricted by travel restrictions implemented to control the spread of COVID-19”, reads part of the brochure that introduced the Citizen Entrepreneurial Development Agency (CEDA)’s informal sector flagship program in 2020.

But now question arises on whether the mission has been achieved by the state owned financial development institution, CEDA.

At the time of the launch in mid-2020, the informal sector association projected that the credit scheme will be out of reach for many of its members’.

The leader of the Botswana Informal Sector Association – Mpho Matoteng told Sunday Standard at the time that their registered members, totally up to 25 000 in urban areas were hard hit by the first national lockdown declared in April 2020.

“We cannot afford to incur extra costs by borrowing money”, Matoteng said a few days after the then Trade Minister – Peggy Serame announced that P10 million has been set aside to assist the informal sector.

Matoteng said that is quite clear that while necessary phases of national lockdown are threatening livelihoods in the informal economy, Botswana government relief efforts are frequently only reaching formal workers and businesses. But now CEDA Head of Marketing & Communications Anno Tshipa says as of October 2022, the state owned development agency has funded 8, 402 projects under Letlhabile to the tune of P40.4 million. Furthermore, the product offering managed to assist businesses retain 9, 662 in the informal sector alone. Of all the loans approved, 83 percent of them (6, 974) were women run businesses and 42 percent of them (3, 529 are youth operated businesses).

“The uptake of the product was convincing, and the monitoring of the existing loan book has shown that it would be worthwhile to review the funding requirements to ensure that the product is more accommodating for the informal sector. As a result, the Agency is working on the revamp of the Letlhabile product offering to be relaunched before the end of the 2022/23 financial year,” says Tshipa.

Initially the Letlhabile programme was meant to address challenges faced by the informal sector during the COVID pandemic.

Tshipa says the Letlhabile product offering facilitated the financial inclusion of entrepreneurs operating in the informal sector.

“Our clients now had access to banking services through means of loans as well as the ability to bank at an individual level through mobile banking as they transact through our Unstructured Supplementary Service Data (USSD) platform.”

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