Facilitating Formalisation of Women-Led Businesses in Botswana

Context

In Botswana, around 25.8% of the country’s 510,953 wage-earners are employed in the informal sector (as of 2016). On top of this, over 50% of informal sector businesses are women-owned, and 67% are at least partially women-owned. The COVID-19 pandemic had an overall negative impact on business activity, especially on informal enterprises. While a large informal sector impacts tax revenue for the public purse, the workers tend not to have the same protection and benefits as those in the formal sector (e.g. sick leave, minimum pay, advance notice of dismissal, minimum standard work conditions).

Therefore, one of the priorities of the Government of Botswana is to formalise more employment and to create decent work conditions, in particular, for women and youth. Reporting to the Ministry of Entrepreneurship, the Citizen Entrepreneurial Development Agency (CEDA) provides different financial products, and non-financial support to promote successful citizen enterprises. It now seeks to develop a more structured approach to supporting women in the informal sector towards decent work, greater productivity and readiness for formalisation.

Objectives

The ICR Facility through its expertise and technical assistance supported the Citizen Entrepreneurial Development Agency (CEDA) to strengthen female entrepreneurship, especially in the informal sector.

This was achieved by:

Conducting a technical study on scoping the challenges and needs of women entrepreneurs;
Developing a CEDA framework (including suitable products) to support women-led businesses in the informal sector towards formalisation and provision of decent work;
Equipping CEDA staff with the knowledge and skills to use that framework with the help of the support session;
Galvanising support to improve the business environment for women by incorporating CEDA into the existing stakeholder engagement structures.

Results

Using a combination of desk review, focus groups and Key Informant Interviews, the intervention has provided clear evidence about the experiences and challenges faced by women running businesses in Botswana’s informal sector, as well as their interest in formalising and the obstacles that get in the way of this. In April 2024, the Citizen Entrepreneurial Development Agency (CEDA) launched the Chema Chema Fund as a direct response to support informal sector businesses, with a strong focus on survivalist and growth-oriented women-led enterprises. The fund was designed to provide both financial and non-financial assistance tailored to the unique challenges faced by informal entrepreneurs, particularly women.

The Chema Chema Fund offers:

Affordable short-term loans to both existing and start-up informal businesses.
Training on viable business management strategies through the Local Enterprise Authority (LEA).
Infrastructure support for grouped informal businesses, including kiosks, hairdressing booths, and catering facilities.
Simplified application processes and targeted support in hubs with high female entrepreneurship activity.

Importantly, the fund’s design and implementation are aligned with client-facing solutions recommended under the Investment Climate Reform (ICR)-supported initiative, ensuring a holistic and impactful approach.

Beyond financial support, CEDA has also prioritized capacity-building and training for Chema Chema clients through its partnership with the Local Enterprise Agency. This non-financial support has been instrumental in building business resilience and enhancing the prospects for formalization among the targeted women-led enterprises.

To further tailor the product to the needs of women entrepreneurs, CEDA made several critical adaptations:

Waived certain disbursement conditions to enable faster access to funds. Initially, disbursements were to be made directly to suppliers, but this was revised to allow direct disbursement to the applicant’s account.
Partnered with Botswana Post to facilitate easier access to the fund for entrepreneurs in remote and rural areas, enabling efficient application collection and processing.
Provided credit for both asset acquisition and working capital needs.
Introduced support infrastructure specifically for female-dominated sectors such as tailoring, catering, and beauty services.

Following high uptake and positive feedback from stakeholders, a Presidential Directive converted the Chema Chema Fund from a loan facility into a grant scheme, marking a significant policy shift aimed at enhancing inclusivity and accessibility, especially for women-led businesses.

As of 23 February 2025, 72% of grant approvals and disbursements were allocated to women-led enterprises, underscoring the initiative’s strong impact in advancing economic empowerment for women in the informal sector.

Towards formalisation of women-owned or -led MSME Report

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This intervention took place under ICR Facility project, co-funded by the European Union (EU), the Organisation of African, Caribbean and Pacific States (OACPS) under the 11th European Development Fund (EDF), together with the German Federal Ministry for Economic Cooperation and Development (BMZ) and the British Council. The ICR Facility was implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (German Development Cooperation, GIZ), the British Council, Expertise France, and Stichting Nederlandse Ontwikkelingsorganisatie (Netherlands Development Organisation, SNV).