In Botswana and other developing countries, informal economic activities, often referred to as the informal sector, are quite common. You’ve likely seen those individuals selling various items like food and clothing on the streets.
People in the informal sector engage in small businesses using public spaces, without formal registration, to make a living. They also enjoy benefits such as tax exemptions until their earnings reach a certain threshold.
However, starting a business with minimal capital doesn’t always create the most favorable working conditions. Operating outdoors in Botswana can be challenging. For instance, there are scorching summers, freezing winters, and the risk of being soaked on rainy days.
One day, Minister of Finance Peggy Serame saw a small coffee stall in front of a conference venue in Morocco. Watching the women sell their goods in a properly sheltered and organized environment reminded her of the women selling food in front of her office back home. She became concerned about the harsh conditions in which these women were working without any shelter.
Upon returning to Botswana, Minister Serame decided to provide these women with tents for shade at her own expense. The women were overjoyed by this unexpected gift, and their working conditions improved significantly overnight.
Inspired by the events in Morocco, the Chema Chema Fund, a lending program for the informal sector, was established. Each business can receive a maximum loan of 50,000 Botswana Pula (approximately 3,700USD) with a repayment interest rate of 2.4%. The Botswana government hopes that by improving their working conditions through this initiative, it will have a positive impact on the overall economy of the country.
By the way, “chema chema” is a word in the Setswana language of Botswana, meaning “just right,” implying a balanced state. Indeed, finding the right balance leads to sustainability.
With the launch of the lending program, it’s no surprise to see people lining up eagerly seeking loans, creating scenes of hope and anticipation.
