[This article is based on our understanding of the State President His Excellency Dr. Mokgweetsi Masisi''s annoucement in July 2020, CEDA Chairman's address and other materials available on CEDA website (www.ceda.co.bw)]

CEDA Guidelines Revised

Citizen Entrepreneurial Development Agency (CEDA) is a Government of Botswana owned Company Limited by Guarantee (State Owned Enterprise) created with the objective of increasing the number of citizen entrepreneurs.  In July 2020, the State President His Excellency Dr. Mokgweetsi Masisi announced revision of Guidelines for lending, guaranteeing and equity participation by CEDA with a view to not only jump-starting the economy of Botswana during the current Covid-19 pandemic, but also to empower citizen partcipation in Botswana private sector.  We recommend any investor to positively consider citizen empowerment initiatives (from participation of citizens in the management of the company to holding of some portion of shares by citizens), while investing or expanding in Botswana.

Loans for Micro and Small Businesses

Micro and Small businesses can now avail loans of up to P 1 million repayable over a period of 7 or less years at a very low interest of 1.5% less than prime which is currently 5.75%, which translates to 4.25% effective per annum.  A further reduction of 1.5% or an effective rate of 2.75% applies to special sectors which are manufacturing, mining, creative industry, technology, agriculture, construction, energy and tourism.  According to Industrial Development Regulations a turnover of P 1.5 million or less and employment of 25 people or less will fall in the category of micro and small businesses.

Loans for Medium and Large Businesses

A medium enterprise can get a loan of up to P 10 million while a large citizen owned company can get a loan of up to P 50 million.  Interest will be equal to primate rate which is currently 5.75%.  Of course special sector will enjoy a sub-prime interest rate of 4.25%.  Repayment period will be 20 years or less, though it will be 15 years or less for loans up to P 5 million.

Equity Participation

CEDA will consider contributing to between 26% and 49% of equity of up to 50 million provided sponsor contributes to minimum 10% equity in cash or in kind.  CEDA will expect a return of at least 5.75% interest and 20 years repayment which applies to the loan portfolio.


CEDA will not charge any fees for micro and small loans. Loans to medium and large companies will attract a fee very much like facility fee and arrangement that currently applies to traditional products like trade finance and bill discounting.

Security Requirements

For loans upto P 5 million, personal suretyship and security of financed assets is mandatory.  For loans over P 5 million collateral security will apply.  For special sectors collateral security requirement may be waived.