27 Feb 2025

In a significant shift aimed at revitalising small and medium-sized enterprises (SMEs) in Botswana, President Advocate Duma Boko has announced the cancellation of the previous Chema Chema loan programme as it has not delivered the desired results.

Addressing the media in Gaborone yesterday, President Boko explained that the former Chema Chema loans, which were extended to small businesses, had seen very low repayment rates. As a result, he said many loans had now been written off as grants. However, for those who had repaid their loans, President Boko said government would reimburse them at a later stage. 

He added that government had spent P200 million on the Chema Chema loan programme, but only 2 per cent of the borrowers paid back their loans.

“Following up with these borrowers and recovering the funds would be costly and ineffective,” President Boko explained, mentioning that pursuing the debtors would only result in what he referred to as unnecessary losses.

He urged business owners to embrace the new, Chema Chema cooperative model for borrowing.

To foster growth and ensure financial sustainability, he said they were transitioning to a new model that encouraged SMEs to collaborate rather than work as individual entities.

Under the new initiative, he said business owners were encouraged to apply for Chema Chema loans as part of a cooperative. This model, the President explained, allowed small businesses to pool resources, increasing their financial strength.

 He gave an example from Saudi Arabia, where if a person were interested in selling goats, they could pool their resources with others to access larger quantities and better pricing.

He mentioned that this same cooperative model could work for Botswana’s SMEs, where, for instance, a small taxi business could expand into owning an airplane business through cooperation and shared resources.

“By working together, SMEs can diversify and grow into larger enterprises that were once out of reach,” President Boko emphasised.

In the new Chema Chema programme, he said businesses would also be able to form specialised cooperatives.

 “Creatives, for example, will be able to come together as creative cooperatives, while those in the agricultural sector can form farmer cooperatives. This segmentation will allow members to pool their talents and resources, whether it be in the creative industries or farming, and thrive collectively.”

President Boko also highlighted the role of women in Botswana’s cooperative business landscape, particularly through metshelo (stokvels).

Traditionally, he said women had been active participants in these savings groups. President Boko encouraged them to take the next step by forming cooperatives under the new Chema Chema loan programme.

By doing so, he said they would gain access to improved financial resources and the ability to leverage technology to streamline operations and foster growth.

The new Chema Chema loans are designed to support cooperative businesses, allowing members to share the risks and rewards of entrepreneurship.

President Boko emphasised the need for digital tools to manage the cooperatives and improve operational efficiency, ensuring that members could collaborate effectively.

He said the government was hopeful that this new approach would not only help SMEs survive but also thrive, creating sustainable job opportunities and contributing to the country’s economic growth.

On other matters he mentioned that the country was planning to invest in the cannabis market and had begun the process of hemp production licensing in Botswana for both medicinal and industrial purposes.

However he said that the market would be regulated with strict laws in place regarding the illegal possession of cannabis.

 He advised Batswana to tap into this market stating that if they had farms they could partner with those with the funds to work together than selling the land.

He said the Ministry of Lands and agriculture, Ministry of Trade and Entrepreneurship as well as the drug agency would be key players in the industry.ends