Small businesses struggle to access financing in most developing countries and in Botswana, the challenge is compounded by a strong focus among lenders on the country’s mining industry.
Solution and Impact:
Partnering with USAID, DFC structured a 50 percent loan portfolio credit guarantee with Botswana’s Absa Bank Botswana, which enabled Absa to lend to Arona Natural Foods, a small local bread producer with fewer than 10 employees.
Absa’s loan was the first commercial financing Arona received, and they used the $2,000,000 loan to purchase additional land and equipment, hire more workers, and expand its operations with additional product lines. These expansions have helped Arona Natural Foods become the sole supplier of baked goods to all of Botswana locations of Woolworth’s, a major supermarket chain based out of South Africa, as well as many other businesses in Botswana. When Botswana was forced to close its borders in response to the COVID-19 pandemic, Arona’s expanded production was also able to meet increased domestic demand from consumers and some major restaurant chains.