Informal sector body dismisses Letlhabile
- Says requirements are more suited to the formal sector
- Declares itself unfamiliar with banking
- Says grants would make better sense
- CEDA says assessments can handle issues raised
FRANCISTOWN: The Botswana Informal Sector Association (BoISA) has cast aspersions on a recently introduced programme under the Citizen Entrepreneurial Development Agency (CEDA) that aims to stimulate informal sector businesses post-COVID-19 lockdown.
Known as Letlhabile, the stimulus programme will provide such businesses with loans from as little as P500 to P10 000 with interest payable over six months.“This programme focuses on supporting businesses in the informal sector and micro-enterprises that were operational prior to movement restrictions,” the CEO of CEDA, Thabo Thamane,said when launching the programme.
However, the General Secretary of BoISA, Mpho Matoteng, has told The Botswana Gazette in an interview that contrary to CEDA’s claim, the Letlhabile programme misses the point because requirements to qualifyfor it are more suitable for the formal sector.
“Evidently, the government confuses the informal sector with small businesses in the formal sector,” Matoteng said. “Our conviction is that the informal sector is made up mainly of hawkers and vendors who are not registered with the Botswana Unified Revenue Services (BURS).”
He noted that the informal sector is not very familiar with banking and banking plans. For that reason, he added, it would make better sense to speak of grants rather than loans. “With the Letlhabile programme, our sector has been sidelined because most of us do not meet the requirements,” Matoeng asserted.
But a spokesperson of CEDA, Neo Tumelo, says the complaints relate to adjustment of loans sought and that this is a matter for assessment by CEDA.“We have noted that most of the concerns arise from reduction of the proposed loans,” Tumelo told The Botswana Gazette.“The applicants have to understand that we do the assessment before allocating the loan proposed.”
Regarding the proposal for grants rather than loans, Tumelo stated that CEDA has a mandate to fulfill. “We have a mandate to account to our stakeholders,” the spokesperson noted. “Besides, amendment should come from the government. We cannot introduce grants before the government gives us instructions to do so.”