The IFC will channel the support via a loan to Peo Finance, a micro-finance company which is a wholly-owned subsidiary of Capricorn Investment Holdings Botswana. Capricorn Investment is in turn, majority owned by Namibia’s Capricorn Group, which also owns Bank Gaborone.
This week, Carlos Katsuya, IFC's senior country manager for Botswana, said the deal with Peo would help the micro-finance firm facilitate access to finance through digital channels to unserved and underserved individuals in Botswana while scaling up lending for agricultural or home improvement activities.
“Peo will play a critical role in improving access to and quality of finance for individuals,” Katsuya said in emailed responses to BusinessWeek’s enquiries.
“The income streams of low-income individuals in Botswana have been severely affected by a slow-down in economic activity in the wake of the pandemic. “As Botswana’s economy begins to recover, there is a need for access to capital to finance investments to support economic activity. “However, access to financing is limited for low-income individuals that were most affected by the pandemic.”
Katsuya said the IFC’s investment in Peo would provide much-needed financing to assist low-income individuals, especially in the agriculture sector, in overcoming liquidity constraints and returning to their previous income-generating capacity.
“IFC’s projects are playing a key role in boosting Botswana’s economic diversification agenda, accelerating recovery from the pandemic and helping to create jobs, reduce inequality, and promote the country’s efforts to achieve sustainable, resilient, and inclusive development,” he said.
Meanwhile, the IFC is also sounding out possible opportunities to partner with private or public sector entities in Botswana in the areas of energy, water and sanitation, as well as tourism. Katsuya said the recently released Country Private Sector Diagnostic report indicates that these areas could create jobs, bridge inequality, and boost economic growth.
“These are key enabling sectors where IFC intends to engage further to support the productivity and competitiveness of other sectors while reducing costs of public services,” he said. “The sectors will help Botswana harness the power of the private sector to speed economic diversification and stimulate a more resilient, greener, and sustainable growth model.”
Already, the IFC is advising the Water Utility Corporation on the structuring of a Public Private Partnership (PPP) for the treatment and reuse of wastewater in Gaborone. The project has been on the cards for years, dating beyond the drying of Gaborone Dam in 2016, and involves treating the wastewater in Gaborone for potable and other uses.
The project is a part of 15 high-priority PPP projects government is seeking investors for.
